Question

A baseball fan with a Mike Trout baseball card wants to trade it for a Giancarlo Stanton baseball​ card, but everyone the fan knows who has a Stanton card​ doesn't want a Trout card. Economists characterize this problem as a failure of the___________.

A. principle of a double coincidence of wants.
B. theory of comparative advantage.
C. irrational exuberance doctrine.
D. market clearing mechanism

Answer 1

The correct answer is option A.

Step-by-step explanation:

The double coincidence of wants or coincidence of wants refers to the situation where two parties possess items that the other one wants so they exchange it directly without using money.

Here, a fan possesses a Mike Trout baseball card who wants to trade it for a Giancarlo Stanton baseball​ card but he does not know anyone who wants a Trout card and possesses a Stanton card.

Simply put, the fan doesn't know anyone who possesses the item he wants and is willing to trade it for the item he possesses. This is an example of failure in the double coincidence of wants.