Suppose that an economy has 100 basic goods and services.If it were a barter economy it would need

A) many more prices than a money economy.
B) a few more prices than a money economy.
C) the same number of prices as a money economy.
D) a few less prices than a money economy.
E) much fewer prices than a money economy.

Question

Antonio Johnson · Accepted Answer

Final Answer : A, Explanation :  In a barter economy, each good or service must have a price relative to every other good or service. With 100 goods, this results in a large number of prices, specifically 4,950 (calculated using the formula n(n-1)/2 for n=100), which is much more than in a money economy where each good only needs one price relative to money.

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