Multiple Choice
When individuals transition from renting to owning a home, which of the following best describes a key trade-off they face?
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0. Basic Principles of Economics
Scarcity and Choice
Multiple Choice
Money encourages specialization by decreasing the need for a double coincidence of wants. Which of the following best completes the statement?
A
need for a double coincidence of wants
B
total amount of resources available
C
marginal utility of consumption
D
opportunity cost of production
Verified step by step guidance1
Understand the concept of 'double coincidence of wants': it refers to the situation in barter systems where two parties each have to want what the other offers in order to make an exchange.
Recognize that money acts as a medium of exchange, which eliminates the necessity for both parties to want each other's goods or services simultaneously.
Identify that by removing the need for a double coincidence of wants, money facilitates specialization because individuals can produce what they are best at and trade for other goods or services using money.
Evaluate the options given and see which one logically fits the statement about what money decreases the need for.
Conclude that the phrase 'need for a double coincidence of wants' best completes the statement, as it directly relates to how money encourages specialization.
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