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Worksheetschp 2 test 1 difficulties of bartar system
Total questions: 14
Worksheet time: 7mins
What does the barter system refer to?
Exchange of goods for goods
Exchange of services for money
Exchange of money for goods
Exchange of services for services
What is a major limitation of the barter system?
Problem of double coincidence of wants
Lack of technology
High transaction costs
Limited goods available
What does 'double coincidence of wants' mean?
Both parties are in the same location
Both parties are willing to barter
Both parties have the same amount of goods
Both parties want what the other has
What is a challenge in determining the value of goods in barter?
Lack of common measure of value
High demand for goods
Limited variety of goods
Excess supply of goods
Why is storage of goods a difficulty in the barter system?
High costs of storage facilities
Lack of transportation
Perishable nature of certain goods
Limited space for storage
What is an example of a perishable commodity?
Rice
Milk
Salt
Wheat
What does indivisibility of goods refer to?
Inability to divide certain goods into smaller parts
Inability to store goods
Inability to transport goods
Inability to sell goods
Why is it difficult to exchange indivisible goods?
They are too expensive
They cannot be divided into smaller units
They are too heavy
They are not in demand
What is a problem associated with deferred payments in barter?
High interest rates
Difficulty in repayment of loans
Lack of trust between parties
Limited time for transactions
What is an example of a good that is difficult to divide?
A bottle of milk
A sack of rice
A goat
A loaf of bread
What is one of the difficulties in storing bulky goods?
Limited supply
Lack of demand
High costs
Space requirements
What does the barter system lack that makes it difficult to compare values?
Standard unit of account
Variety of goods
Transportation methods
Trust between parties
What is a key characteristic of the barter system?
Standardized pricing
Reliance on credit
Use of currency
Direct exchange of goods
What is a consequence of the lack of double coincidence of wants?
Increased prices
Inability to complete transactions
More goods available
Faster exchanges
