Which of the following is a problem with barter? a. Individuals will not exchange goods. b. Individuals' wants must coincide in order for there to be exchange. c. Goods can be exchanged, but services cannot. d. None of the above is a problem.

Short Answer

Expert verified
The main problem with the barter system is (b) Individuals' wants must coincide in order for there to be exchange. This represents the "double coincidence of wants" which makes exchanges challenging and inefficient.

Step by step solution

01

Evaluate Options

Examine each statement and determine which one describes the main problem with a barter system. a. "Individuals will not exchange goods." This statement is not always true, as barter systems have been practiced in history where individuals did exchange goods. b. "Individuals' wants must coincide in order for there to be exchange." This statement presents the problem of the "double coincidence of wants," in which two parties must have what the other wants for an exchange to occur. This can make exchanges challenging and inefficient in a barter system. c. "Goods can be exchanged, but services cannot." This statement is not entirely true, as services can and have been exchanged in barter systems, although it may be more difficult to measure the value of services. d. "None of the above is a problem." This statement simply denies the existence of a problem.
02

Choose the Correct Statement

Based on the evaluation, the correct answer is (b), which describes the "double coincidence of wants" as a problem with the barter system.

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