The Barter System of Exchange Is Inefficient Because

question 53

Multiple Choice

The barter system of exchange is inefficient because

• A)exchange partners need to know each other.
• B)markets do not exist.
• C)"fair" values cannot be defined without the use of money.
• D)bargaining power is unequal between rich and poor.
• E)the double coincidence of wants may not exist.

---

Definitions:

Diminishing Marginal Utility

The decrease in satisfaction or usefulness as additional units of a product are consumed.

Staples

Basic or essential food items or goods that are widely used and regularly consumed by households.

Paper Clips

Tiny segments of twisted wire or plastic designed to keep pages of paper attached.

Marginal Utility

The additional satisfaction or utility a consumer receives from consuming one additional unit of a good or service.