A situation where two economic agents have complementary demand for each other’s surplus production is called:
Answer & explanation
Correct answer: option 1
The correct answer is Option (1) → Double coincidence of wants
Barter works only when each person wants what the other has to spare. This rare match of wants is called the double coincidence of wants.
NCERT (2026-27): “Economic exchanges without the mediation of money are referred to as barter exchanges. However, they presume the rather improbable double coincidence of wants. Consider, for example, an individual who has a surplus of rice which she wishes to exchange for clothing. If she is not lucky enough she may not be able to find another person who has the diametrically opposite demand for rice with a surplus of clothing to offer in exchange. The search costs may become prohibitive as the number of individuals increases.” Glossary: “Double coincidence of wants - A situation where two economic agents have complementary demand for each others’ surplus production.” |