A Problem with Barter Exchange When There Are Many Goods

question 74

Multiple Choice

A problem with barter exchange when there are many goods is that in a barter system

• A) transactions costs are minimized.
• B) there exists a multiple number of prices for each good.
• C) there is only one store of value.
• D) exchange of services is impossible.

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Definitions:

Trading Partners

Countries, organizations, or individuals that engage in the exchange of goods, services, or information.

Joint Output

Products or services that are produced together in the course of a single production process, often resulting in a correlation between their quantities or prices.

Comparative Advantage

The ability of a country or entity to produce a good or service at a lower opportunity cost than others.

Opportunity Costs

The decline of potential rewards from different options as a result of choosing one.