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Questions and Answers
What is one of the inherent limitations of the barter system?
What is one of the inherent limitations of the barter system?
- No problem of divisibility
- Ease of storage for perishable goods
- Abundance of common measure of value
- Lack of double coincidence of wants (correct)
Why did the barter system become obsolete?
Why did the barter system become obsolete?
- The barter system had no problem of divisibility
- The barter system was too efficient for the growing civilization
- Human wants multiplied and the barter system could not meet the increased demands (correct)
- The barter system had a common measure of value for all goods
What was a problem of storage under the barter system?
What was a problem of storage under the barter system?
- There was no problem of storage
- Storage was unnecessary in the barter system
- Commodities exchanged were all non-perishable
- Most exchanged commodities were perishable (correct)
Why was there a lack of common measure of value in the barter system?
Why was there a lack of common measure of value in the barter system?
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Why is lack of double coincidence of wants considered a limitation of the barter system?
Why is lack of double coincidence of wants considered a limitation of the barter system?
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Study Notes
Limitations of the Barter System
- One of the inherent limitations of the barter system is the lack of double coincidence of wants, where two parties have to simultaneously want what the other has to offer.
- The barter system became obsolete because of its limitations, which made trade difficult and inefficient.
- A problem of storage under the barter system was the need to store perishable goods until a suitable trading partner was found.
- The lack of a common measure of value in the barter system made it difficult to determine the value of goods and services.
- The lack of double coincidence of wants meant that trade could only take place when both parties had what the other wanted, making trade limited and infrequent.
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Description
Test your knowledge of the barter system with this quiz! Explore the challenges and limitations of bartering and see if you agree with the statement that there are no difficulties in the barter system.
