Originally Posted by Pocket-full-of-gold
We dropped 1 and 2 cent bits here in Oz years ago for exactly the same reason....it cost more to make than the value of the coin. As far as I'm aware it's had no material impact on anything.......it certainly hasn't affected day to day living despite many people raising similar questions to those raised here (there were concerns at the time that it may evolve on to include 5 cent peices as well, but as yet this hasn't materialised). Everything is just rounded up (or down....believe it or not, it does actually happen on occasion).
Five cent pieces have been irritating for a few years now but they make a difference to those living on the edge (eg. aspiring musicians, artists, writers and poets).
Agree that the tipping factor is production costs, also practicality. You don't want lots of swapping and counting of small coins in supermarkets. Coins weigh a ton in my purse and probably wear out your wallets and jeans.