Which Statement Best Defines Barter

question 169

Multiple Choice

Which statement best defines barter?

• A) It is an exchange of goods for money.
• B) It is an exchange of money for foreign currency.
• C) It is a generally accepted legal tender.
• D) It is a transaction that requires a double coincidence of wants.

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Definitions:

Elasticity

A measure of the responsiveness of demand or supply to changes in price, income, or other economic factors.

Resource Demand

The total amount of resources (such as labor, capital, and materials) that producers require to produce goods and services at various price levels.

Elastic Demand

Product or resource demand whose price elasticity of demand is greater than 1, so that any given percentage change in price leads to a larger percentage change in quantity demanded. As a result, quantity demanded is relatively sensitive to (elastic with respect to) price.

Output Effect

The change in total output resulting from adjusting the production of one good in response to price changes, while holding utility constant.