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.

Question

Quizplus · Accepted Answer

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.

Barter Works Best When