Question

Amy has opened a new startup company in web design. Within the first month of business, the startup agrees to maintain an accounting firm's website in exchange for someone at the firm doing the startup's tax returns. Which of the following principles of economic interaction best describes this scenario?

a) Trade can make everyone better off.
b) When markets do not achieve efficiency, government intervention can improve overall welfare.
c) Markets allocate goods effectively.
d) All costs are opportunity costs.

Answer 1

a) Trade can make everyone better off

Step-by-step explanation:

In business, it is common to see trades. If the startup agrees to maintain an accounting firm's website in EXCHANGE for the tax returns, that is called trading since you are giving one thing for another.

Hope this helps! :)