Microeconomics: Principles, Problems, & Policies, 20th Edition

Published by McGraw-Hill Education
ISBN 10: 0077660811
ISBN 13: 978-0-07766-081-9

Chapter 2 - The Market System and the Circular Flow - Discussion Questions: 5

Answer

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Work Step by Step

Before the days of money, people would commonly barter in order to exchange goods. (Bartering refers to directly trading one good for another good.) However, money has multiple advantages. First of all, it is divisible, for I can pay half a dollar for an apple, but it does not make sense to pay half a chair. In addition, money helps compare the price of different goods more easily.
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