• Card 11 / 100: If a producer good only provides benefits indirectly, can a producer good be obtained via direct exchange?

    Answer:
    Yes. The text discusses the example of a farmer trading away bacon for tomato seeds, which are presumably a producer good (intended for planting to yield tomatoes). So long as both farmers intend on using the obtained goods themselves (rather than trading them away yet again), the exchange is a direct one. (The distinction between direct and indirect exchange will be much clearer after you work through Lesson 7.)

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Capitalism: The Market Economy

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Attribution:  Dr. Robert P. Murphy, Lessons for the Young Economist. (Mises Institute), http://mises.org/document/6215/Lessons-for-the-Young-Economist (Accessed 04 April, 2014). License: Creative Commons BY
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