Explain double coincidence of wants with example?

Question

Answer

A shoe manufacturer wants to sell shoes in the market and buy wheat. The shoe manufacturer

will first exchange shoes that he had produced for money, and then exchange the money for wheat. Imagine how difficult it would be if the shoe manufacturer had to directly exchange shoes for wheat without using money. He would have to look for a wheat growing farmer, who not only wants to sell wheat but also wants to buy the shoes in exchange. That is, both parties have to agree to sell and buy each other’s commodities. This is known as double coincidence of wants.

Examples: (i) Farmer can exchange their grains by taking clothes from cloth maker.

(ii) Teachers get food to eat in exchange of teaching.

(iii) In modern era, farmers can exchange cereals for money to buy essential goods.

Answer

In double coincidence there are 2 parties which is exchange their goods instead of money .They dnt need money but they need what they want .
for eg. Farmer and shoes worker they can exchange their goods like farmer needs shoes to wear and shoes worker needs some wheat to eat .

Answer

Double coincidence of wants refers to the requirements of 2 people which can be fulfilled by the exchange of goods between them without any money. For example, a person has rice but he is in need of wheat and other who has wheat but he is in need of rice. Then they will exchange their goods.

Answer

Double coincidence of wants means the requirement of the things available with both of two needed person.such as, Mohan needs wheat and he has cloth then he has to find those person who has wheat and also wants to cloth.these types of requirement is very necessary for double coincidence.

Answer

The 'DOUBLE COINCIDENCE OF WANTS' mean that both the parties have to AGREE to SELL and BUY each other's COMMODITY i.e.,,,,,,,... what a person desires to sell is exactly what the other person wishes to buy....

Answer

Double Coincidence of Wants: Explained with Example

The concept of 'double coincidence of wants' is a fundamental aspect of barter exchange, which refers to the mutual agreement between two parties to trade goods or services directly without the involvement of money. It is a necessary condition for a successful barter transaction to take place. In other words, both parties must desire what the other has to offer, and their wants must align perfectly.

Explanation:

To understand the concept better, let's consider an example:

Imagine a scenario where Person A, a farmer, wants to exchange his wheat for some clothes. Person B, a tailor, wants to exchange his clothes for wheat. In this case, there is a 'double coincidence of wants' as both parties desire what the other has to offer. Person A wants clothes, and Person B wants wheat. Therefore, they can directly engage in a barter transaction without the need for money.

Importance of Double Coincidence of Wants:

The concept of double coincidence of wants is crucial because it allows for the efficient exchange of goods and services in a barter system. Without this coincidence, trade becomes quite challenging as finding a party with a complementary desire becomes increasingly difficult.

Lack of Double Coincidence of Wants:

In situations where there is a lack of double coincidence of wants, the barter system becomes inefficient. For instance, if Person A wants clothes, but Person B wants shoes instead of wheat, a direct exchange between them becomes impossible. They would need to find a third party who wants wheat and has shoes to offer, creating a chain of exchanges, which can be time-consuming and impractical.

Alternatives to Double Coincidence of Wants:

To overcome the problem of double coincidence of wants, societies have historically introduced a medium of exchange, such as money. Money acts as a common unit of value that is widely accepted by all parties, eliminating the need for a direct match of desires.

Conclusion:

In conclusion, the double coincidence of wants is a necessary condition for successful barter exchanges. It requires both parties to desire what the other has to offer, enabling a direct trade without the involvement of money. However, due to its limitations, societies have adopted a medium of exchange, such as money, to facilitate trade efficiently.

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