Logical Reasoning

PT102 · S2 · Q14 As a preliminary to negotiating

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Numismatist: In medieval Spain, most gold coins were minted from gold mined in West Africa, in the area that is now Senegal.

Background

Senegalese gold came out of the mine more pure than any other gold (it was already 92% gold).

Because the gold content was already so pure, these coins were never refined (i.e. melted down to remove impurities in order to get closer to 100% gold). They just made coins straight up from the 92% gold.

Given that ..

Other coins had purer gold content (and thus would seemingly be more valuable than a Senegalese coin of the same size).

Why is it that ...

Merchants wanted payment in Senegalese gold?

Evaluate / Goal

We just need an answer that would explain a merchant's preference for Senegalese gold.

The key differences we know between Senegalese gold vs. other coins? - Senegalese gold was never refined / other coins were - Senegalese gold was always 92% gold / other coins may have had purer gold content

My guess would be that the standardization of gold content was preferable to the variable gold content you might get by dealing with other coins.

14.

As a preliminary to negotiating prices, merchants selling goods often specified that payment should be in the coins minted from Senegalese gold. Which one of the following, if true, most helps to explain this preference?

  1. Correct

    Because refined gold varied considerably

    Why this is right

    This answer shows why using refined gold coins had a detriment when it came to specifying price --- the actual value the seller received in gold coins could vary a lot, depending on whether the coins received were 90% gold / 95% / 100%. Meanwhile, Senegalese gold was unrefined, so it was a guarantee you were getting 92% gold. To put it another way, I'd rather get paid in nickels if I can be guaranteed each one is worth 5 cents, than to be paid in dimes if their actual value is going to vary between 8-12 cents each.

    Skill tested: Paradox · how this choice captures the argument's function is the move to repeat next time.

    69% picked this

  2. During this period most day-to-day

    Opposite, if anything

    This sounds like merchants preferred silver coins, since it was the typical coin used in most day-to-day trading. A merchant is usually found in a marketplace, selling day-to-day items to locals. This answer also only helps us to explain why now and then a merchant might want to use gold, but this answer does nothing to differentiate Senegalese gold from other forms of gold.

    3% picked this

  3. The mints were able to

    Opposite, if anything

    We were suspecting that maybe the advantage the Senegalese gold has was that you could bank on (no pun intended) its gold content being a steady 92%. But according to this answer, the mints were able to determine the purity / value of other coins just as well.

    19% picked this

  4. Since gold coins’ monetary value

    Opposite, if anything

    This doesn't sound like merchants insisting on gold from Senegal (or West Africa, at the time). It sounds like they were fine getting coins minted in several different countries. And to the extent that gold coins' monetary value rested on the gold they contained, it deepens the paradox. Why wouldn't merchants have specified that payment should be in a coin that was higher than 92% gold (as we know some coins were)?

    8% picked this

  5. Merchants obtaining gold to resell

    Opposite

    First of all, this sounds like a very narrow edge case, not a typical situation confronting most merchants. But even in this fringe case of obtaining gold to resell in jewelry, it's saying that the preference would have been for refined gold, whereas Senegalese gold was famously unrefined.

    2% picked this

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