Practicing Success
Barter exchange's major limitation was that it involved huge trading cost. Which of the following costs can be considered as part of trading costs? |
Inequality cost and search cost Ground cost and utility cost Search cost and disutility of waiting None of the above |
Search cost and disutility of waiting |
There were many problems of barter system as it was a commodity for commodity exchanges system. Due to high trade cost, evolution of money began. Trade costs i.e. search cost and disutility of waiting made barter exchange inconvenient as the person A had to wait for person B who has demand for the commodity that the former person is having. |