Chapter 23, Problem 1MCQ

To determine

The correct option that refers to function of money that is served if lunch is being purchased.

Answer to Problem 1MCQ

Option a and c are correct.

Explanation of Solution

Explanation for correct option:

a.

In this, lunch has been prepared for the customer who is ready to make payment in exchange. Therefore, option a is correct.

c.

As a unit of account function of money, the lunch that has been purchased must possess a value for which money should be paid. Lunch is a tangible item that can have value and for which economic calculations can be done. Therefore, option c is correct.

Explanation for incorrect options:

b.

Since, money is used for purchasing, the unit of account along with medium of exchange will be the role played by money. Store of value refers to the holding purchasing power so that future transactions can be done. Therefore, option b is incorrect.

d.

Measure of usefulness can be different for different people. Therefore, option d is incorrect.

e.

Since, all options are not correct. Therefore, option e is incorrect.

Economics Concept Introduction

Money: Money is the medium of exchange through which goods and services can be traded. It can perform three main functions i.e. medium of exchange, store of value and unit of account.