Current resources and prefer-ences of each person

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Consider the following two economies, each of which has three people, Je?, Walter, and Maude. Below is a description of each economy, including the current resources and prefer-ences of each person:

• Economy 1: Je? wants Rugs and has Bowling Balls; Walter wants Folger’s cans and has Rugs; Maude wants Bowling Balls and has Folger’s cans.

• Economy 2: Je? wants Rugs and has half and half; Walter wants nail polish and has Rugs; Maude wants half and half and has Rugs.

In each economy, describe what functions money can potentially serve to improve the functioning of the economy. Does one economy bene?t more from having money than another (i.e. does money serve more functions in one economy relative to the other)? Explain and justify your answer.

Reference no: EM13985852

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