Barter is the direct exchange of goods or services for other goods or services, without the use of money. Which of the following situations is the best example of barter?
Answer & explanation
Correct answer: option 2
The correct answer is Option (2) → A farmer gives a carpenter two sacks of wheat, and in return the carpenter mends the farmer’s wooden cart.
Barter has two parts: goods or services are exchanged for other goods or services, and no money is used.
In Option (2) the farmer’s wheat is exchanged for the carpenter’s service of mending the cart, and no money changes hands. Both parts are present.
Why the other options are incorrect
Option (1) A farmer sells two sacks of wheat at the weekly market for ₹1,800. — Incorrect. The farmer gets money for the wheat, so it is a sale, not barter.
Option (3) A farmer gives two sacks of wheat to a flood relief camp and asks for nothing in return. — Incorrect. The farmer gets nothing in return, so there is no exchange; it is a gift.
Option (4) A carpenter mends a farmer’s wooden cart, and the farmer pays him ₹500 for the work. — Incorrect. The carpenter’s service is paid for with money.