#13 - Economist: Money, no matter what its form and in

[Anali]

Hi!

The paradox in this question stim is regarding the value of money. The economist believes that the value of money is derived from it being scarce, whether real or perceived. The anthropologist counters this belief by providing an example: the Solomon Island economy used cowrie shells as currency, and there were an unlimited amount of these kinds of shells.

Is the correct answer choice to this question (D)? This is my reasoning for eliminating the other answer choices:

Answer choice (A): This choice does not address the issue of scarcity or abundance, so it should be eliminated.
Answer choice (B): The stimulus is not concerned about porpoise teeth. The issue at the heart of this stimulus is about the value of money and cowrie shells.
Answer choice (C): Somewhat similar to (A) in that it does not really address scarcity or abundance. Who cares about other species of cowrie shells?
Answer choice (E): This choice expands the paradox. If other currency was introduced to this economy then that would explain why there were so many of these kinds of shells; this does not allow for the economist's position to be true.

Answer choice (D): Ah-ha! There were many cowrie shells but not all cowrie shells were used as currency, because there was this elaborate process in converting these shells into currency. This AC allows for both positions to be true.

[Eric Ockert]

Anali

Yes! The correct answer choice is (D). Your analysis here looks right on point. With resolve questions, look for the answer that makes the two seemingly contradictory sides of the paradox really not all that surprising.

So here, how could it be that money derives its value from scarcity, yet these cowrie shells were so abundant? That seems contradictory.

By adding the fact in answer choice (D), both sides of that paradox are still true, but it isn't that surprising. Because now, even though the shells are abundant, the finishing that goes into the ones used as currency might very well make them scarce.

[Anali]

Thank you for confirming the correct answer and for your explanation Eric!

[andriana.caban]

Hi!

There were many cowrie shells but not all cowrie shells were used as currency"

Can you please explain why this is?

How can we assume that not all cowrie shells were used. I assumed that all were used except it took a long time to polish and carve them. I choose (C) thinking that, although there's an unlimited number of shells in the Solomon Island, because men and women use different species shells there could be instances where money is limited.

[Jeremy Press]

Hi Andriana!

The language of the correct answer, choice D, says that the Kwara'ae "accepted as money only cowrie shells that were polished and carved by a neighboring people, and such shell preparation required both time and skilled labor." The word "only" creates a limited subset of cowrie shells that the Kawara'ae would accept as money, and implies there were other shells (non-prepared) that they would not accept. Moreover, since this subset of shells required time and skilled labor, we can assume some scarcity (i.e., that there would not have been sufficient time and skill to convert every cowrie shell into this special shell).

With answer choice C, we cannot infer a limitation simply from the species difference that the answer refers to. We would need additional information to know whether the shells (on an overall basis, including the ones used by both men and women, of all species) were scarce enough to have value as money for both the men and the women.

I hope this helps!

Jeremy