Question

Give an example to show that double coincidence of wants is necessary in a barter system

Answer 1

Answer:

A shoe manufacturer wants to sell shoes in the market and buy wheat. The shoe manufacturer

will first exchange shoes that he had produced for money, and then exchange the money for wheat. Imagine how difficult it would be if the shoe manufacturer had to directly exchange shoes for wheat without using money. He would have to look for a wheat growing farmer, who not only wants to sell wheat but also wants to buy the shoes in exchange. That is, both parties have to agree to sell and buy each other’s commodities. This is known as double coincidence of wants.

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Answer 2

Here is your answer ::

A shoe manufacturer wants to sell shoes in the market and buy wheat. The shoe manufacturer

will first exchange shoes that he had produced for money, and then exchange the money for wheat. Imagine how difficult it would be if the shoe manufacturer had to directly exchange shoes for wheat without using money. He would have to look for a wheat growing farmer, who not only wants to sell wheat but also wants to buy the shoes in exchange. That is, both parties have to agree to sell and buy each other’s commodities. This is known as double coincidence of wants.