Asked by Chris Miller on Jun 02, 2024
Verified
Barter works best when:
A) there is an absence of a double coincidence of wants.
B) many different products are available in the economy.
C) money is readily available to establish relative prices.
D) each trader has what the other wants and wants what the other has.
E) highly developed economies achieve extensive specialization of labor.
Absence
The state of something being not present or lacking.
Double Coincidence
A condition in barter systems where two parties each possess an item the other wants, facilitating a direct exchange without the need for a common currency.
Different Products
Varieties of goods and services that are distinct in quality, features, or branding, catering to diverse consumer needs.
- Become aware of the restrictions and problems characteristic of barter systems.
- Comprehend the principle of mutual coincidence of needs in trade by barter.
Verified Answer
MB
Maame BonneyJun 08, 2024
Final Answer :
D
Explanation :
Barter works best when each trader has what the other wants and wants what the other has. This is known as a double coincidence of wants, which can be difficult to achieve, but when it does, bartering can occur efficiently. The absence of a double coincidence of wants (option A) can make bartering difficult, and without money (option C), it is more challenging to establish the relative value of goods or services being exchanged. Many different products being available in the economy (option B) and extensive specialization of labor in highly developed economies (option E) may create more opportunities for bartering, but neither is necessary for barter to work well.
Learning Objectives
- Become aware of the restrictions and problems characteristic of barter systems.
- Comprehend the principle of mutual coincidence of needs in trade by barter.