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Bartering for Basics Answer Key Form

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In very simple economy, with very few goods, people can barter. But when the economy grows, barter trade becomes ineffective. Let me explain this with the simple example. There was a small village by the river. At first, there were only two families. One of them bred rabbits, and the other grew wheat. To diversify their diet, they traded with each other. They agreed that one bag of wheat will be exchangeable for one rabbit. After some time, other families began to settle in the village. Every family produced something else. Some of them were producing clothes, other fished and still others bred cattle. Over time, there were many goods and services. A shoemaker, send his daughter Catherine to get a bag of wheat. Girl took the shoes and went to the farmer to propose a trade. The farmer agreed because he needed shoes and they exchanged. Next day, shoemaker, sent Catherine again to get one bag of wheat. But this time farmer replied: "I'm sorry, I don't need a second pair of shoes, but I w

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