Question

Read the following dialogue between two people:
Sita : I want 1 kg of potatoes
Rani : What will you give in exchange?
Sita : I can give you 2 litres of milk in return for the potatoes.
Rani : I don't need milk. I want a pair of shoe

Which of the following problem is being faced by Sita and Rani in their exchange process?

• A. Lack of double coincidence of wants
• B. Absence of common units of value
• C. Lack of store of value
• D. Lack of standard of deferred payment

Answer 1

The correct option is A Lack of double coincidence of wants

This is a system of barter system where goods are exchanged for goods and there is no common medium of exchange in the economy. The problem faced by Sita and Rani is lack of double coincidence of wants where goods need by one party in exchange of supplying the required goods to the other party does not match with the goods offered by another party due to which the initial transaction is not been processed.