The "coincidence of wants" problem associated with barter refers to the fact that
A) for exchange to occur, each seller must have a product that some buyer wants.
B) money must be used as a medium of exchange or trade will never occur.
C) specialization is restricted by the size or scope of a market.
D) buyers in resource markets and sellers in product markets can never engage in exchange.

Question

Quizplus · Accepted Answer

The coincidence of wants problem refers to the fact that for exchange to occur in a barter system, each party must have something the other wants. Without this mutual desire for goods, trade cannot happen. Money serves as a medium of exchange to eliminate this problem in modern economies. Choice B is incorrect because the coincidence of wants problem existed before the invention of money. Choice C is also incorrect because specialization can occur as long as there is a market for the specialized product or service. Choice D is incorrect because buyers and sellers can engage in exchange in resource markets and product markets in traditional barter systems, as long as they have goods or services that the other wants.

The "Coincidence of Wants" Problem Associated with Barter Refers to the Fact