Mutually Beneficial Trade: Dale and Terrence

What happens when Dale teaches Terrence's daughter to play the guitar in exchange for Terrence tiling Dale's kitchen floor?

a. only Dale is made better off by trade.
b. both Dale and Terrence are made better off by trade.
c. neither Dale nor Terrence are made better off by trade.
d. only Terrence is made better off by trade.

If Dale teaches Terrence's daughter to play the guitar in exchange for Terrence tiling Dale's kitchen floor, Option B. both Dale and Terrence are made better off by trade.

In this scenario, Dale is a guitar teacher and Terrence is a tile layer. Dale teaches Terrence's daughter how to play the guitar in return for Terrence tiling Dale's kitchen floor. It is a classic example of trade and bartering. Dale, the guitar teacher, would have had to pay for tile installation if he hadn't bartered with Terrence, the tile layer. Terrence, on the other hand, would have had to pay for guitar lessons if he hadn't traded with Dale.

Both Dale and Terrence, therefore, benefit from the trade, and they are both better off as a result. Because Dale receives tile installation in exchange for teaching guitar lessons, and Terrence receives guitar lessons in exchange for tile installation, both benefit.

In conclusion, the answer is (b) both Dale and Terrence are made better off by trade. When both parties are better off after a trade, it is known as a mutually beneficial trade. Trade, in general, promotes mutual gains by allowing people to concentrate on what they do best and exchange their output with others for goods and services that they desire. Therefore, the correct option is B.

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