Question

A potato farmer wants rice but the rice farmer doesn't want potatoes, he is in need of bananas. Identify the condition.

Answer 1

Answer:

lack of double coincidence of wants

Answer 2

A potato farmer wants rice but the rice farmer doesn't want potatoes, he is in need of bananas. This condition is Double Coincidence of wants.

Explanation:

• The situation described in the question is the lack of a double coincidence of wants in which the requirement of potato farmer can only be fulfilled if the rice farmer wants potato in return.
• However, in this situation, rice farmer is in need of bananas and not potato so the exchange of commodity does not take place.
• Such kind of situation arises in the barter system in which the trade can take place only when double coincidence of wants takes place.
• Otherwise there would be no transaction owing to which basic needs of people are difficult to fulfill.

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