Asked by Marina González on Jun 09, 2024

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The "coincidence of wants" problem associated with barter refers to the fact that

A) for exchange to occur, each seller must have a product that some buyer wants.
B) money must be used as a medium of exchange or trade will never occur.
C) specialization is restricted by the size or scope of a market.
D) buyers in resource markets and sellers in product markets can never engage in exchange.

Coincidence of Wants

A situation in a barter economy where two parties each possess goods or services that the other wants, facilitating a direct exchange without the need for money.

Barter

The direct exchange of one good or service for another good or service.

Medium of Exchange

An intermediary instrument or system used to facilitate the sale, purchase, or trade of goods between parties.

  • Identify the advantages of specialization and labor division in improving productivity and economic efficiency.
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JJ
Jinzhou JiangJun 16, 2024
Final Answer :
A
Explanation :
The "coincidence of wants" problem in barter arises because without a medium of exchange, each buyer and seller must have a product that the other party wants. This can make exchange difficult, inefficient, and sometimes even impossible. Money, as a medium of exchange, helps solve this problem by facilitating transactions between buyers and sellers with different wants and needs. Option B is incorrect because while money is a solution to the coincidence of wants problem, it is not the only solution. Option C is incorrect because specialization is not directly related to the coincidence of wants problem. Option D is incorrect because buyers and sellers in resource markets and product markets can engage in exchange, provided there is a demand for the resource/product and a mutually acceptable price.