Multiple Choice
Under which circumstances are out-of-pocket costs also considered opportunity costs?
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0. Basic Principles of Economics
Scarcity and Choice
Multiple Choice
Which of the following is a disadvantage of bartering compared to using currency to purchase goods?
A
Bartering allows for easier comparison of prices.
B
Bartering requires a double coincidence of wants between traders.
C
Bartering increases the efficiency of large-scale markets.
D
Bartering provides a standardized unit of account.
Verified step by step guidance1
Understand the concept of bartering: Bartering is the direct exchange of goods and services without using money as a medium of exchange.
Identify the key characteristics of bartering: It requires that both parties have something the other wants, known as the 'double coincidence of wants.'
Compare bartering to using currency: Currency acts as a medium of exchange, a unit of account, and a store of value, which simplifies transactions.
Recognize the disadvantages of bartering: One major disadvantage is the difficulty in finding two parties who want to exchange goods directly, i.e., the double coincidence of wants problem.
Evaluate the given options: The correct disadvantage of bartering is that it requires a double coincidence of wants, unlike currency which eliminates this problem.
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