In an economy transitioning toward a greater division of labour, workers become highly specialised in extremely narrow productive tasks. In the absence of money, why does this increased specialisation make a barter system increasingly difficult to sustain?
It decreases the likelihood of establishing a double coincidence of wants, as specialised producers offer highly specific outputs but still require a diverse range of consumption goods.
It eliminates comparative advantage, which prevents mutually beneficial trade from occurring between highly specialised producers.
It causes a rapid increase in the unit costs of production, which renders barter trade unprofitable for all specialized agents.
It prevents specialised producers from experiencing diminishing marginal utility, leading to an infinite demand that collapses the barter market.
35 exam-style questions on OCR A Level Economics Specialisation and trade. Each one has a worked solution and a mark scheme showing where the marks go.