Question

The coincidence-of-wants problem associated with barter refers to the fact that A. money must be used as a medium of exchange, or trade will never occur. B. for exchange to occur, each seller must have a product that some buyer wants. 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.

Answer 1

The correct answer is: B. for exchange to occur, each seller must have a product that some buyer wants.

The coincidence-of-wants problem refers to a potential problem individuals might face when conducting a barter trade. In a barter trade system, one individual buys something from another individual by giving him or her another thing in return. An example of a barter trade between farmers would be trading five sheep for five goats. However, when conducting a barter trade, both sellers involved must have a product that some buyer wants. This refers to 'coincidence of wants'.