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Commodities used historically in exchange included cowrie shells, salt, tea, tobacco, cloth, cattle, seeds and other goods.
If one student has an extra eraser and another has an extra pencil but needs an eraser, they can exchange the eraser for the pencil through barter.
1. What best defines a barter system?
2. Which situation is an example of direct barter?
3. What must be true for a double coincidence of wants to occur?
What is the barter system?
A way of exchanging goods and services without money.
How do people exchange goods in a barter system?
By directly trading one good or service for another that meets their needs.
What is double coincidence of wants in barter?
Two people each have something the other wants and can exchange directly.
What does a common standard measure of value do in an economy?
It helps determine and compare the value of goods and services.
Barter System Definition
Exchange goods/services directly without money.
Problems of Barter
Requires double coincidence of wants.
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