Barter Is Extremely Inefficient Because

question 144

Multiple Choice

Barter is extremely inefficient because:

• A) you have to find someone who both has what you want and wants what you have.
• B) it is associated with very high transaction costs.
• C) people and firms have to spend a lot of time looking for mutually agreeable trades.
• D) All of these are true.

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Definitions:

Price Ceiling

A government-imposed limit on how high a price can be charged for a product.

Equilibrium Price

The market price at which the quantity of goods supplied equals the quantity of goods demanded.

Supply Curve

A graphical representation of the relationship between the price of a good and the quantity of that good that suppliers are willing and able to supply.

Demand Curve

A graph showing the relationship between the price of a good and the quantity of the good that consumers are willing to purchase.