Which of these is a necessary condition for trade by barter?

Step 1: Analyze the question The question asks what must be present for barter (direct exchange of goods for goods, with no money) to take place.

Step 2: Explain the concept In barter, you must find someone who has what you want and who also wants what you have. Economists call this the double coincidence of wants. It is the best-known requirement for barter, and its absence is the main weakness of barter. Money was introduced to solve this problem.

Step 3: Evaluate the options

• A. Double coincidence of wants: Correct. Without it, no direct swap can happen. Example: a yam farmer in Benue who wants fish must find a fisherman who also wants yams.
• B. Double exchange rate: Not an economic concept relevant here.
• C. Durability of goods: This is a quality of good money, not a condition for barter.
• D. Divisibility of commodities: This is also a characteristic of money. Indivisibility is actually a problem in barter, not a requirement.
• E. Homogeneity of goods: Barter involves exchanging different goods, so this is not a condition.

Step 4: Answer The necessary condition for barter is A. double coincidence of wants.

Tip: Remember "barter = double coincidence." Whenever a question asks about the problems or requirements of barter, think of this phrase first. Also note that durability, divisibility, and homogeneity are properties of money, not conditions for barter.