Rajesh is a weaver and is looking for food for his family. He approaches Shyam who is a farmer and offers to exchange clothes in return for wheat. However, Shyam says that his family needs shoes, not clothes. Which shortcoming of the barter system is being highlighted in this case?
Answer & explanation
Correct answer: option 1
The correct answer is Option (1) → Lack of double coincidence of wants.
In a barter system, exchange of goods takes place directly without using money. For such exchange to occur, both parties must want what the other offers — this condition is called double coincidence of wants.
In this case,
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Rajesh (the weaver) wants wheat.
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Shyam (the farmer) wants shoes, not clothes.
Since their wants do not match, the exchange cannot take place. This clearly shows the lack of double coincidence of wants, one of the major limitations of the barter system.