ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Voluntary exchange is a type of transaction where two parties freely trade goods or services. This occurs in a market economy, which is a type of economy where both participants of an interaction gain a mutual benefit from it and are better off than when they started.

Detailed explanation-2: -The principle of voluntary exchange is based on consumers and producers acting in their self-interest. A voluntary exchange between a consumer and a producer makes both parties better off than they were before the exchange.

Detailed explanation-3: -Voluntary exchange is important because it lets everyone pursue their interest. It promotes economic activity and growth. It also allocates resources in a way that will benefit society. Thus, voluntary exchange is essential for a free market economy.

Detailed explanation-4: -Voluntary exchange is the act of buyers and sellers freely and willingly engaging in market transactions. Voluntary exchange is a fundamental assumption in classical economics and neoclassical economics which forms the basis of contemporary mainstream economics.

Detailed explanation-5: -Detailed Solution. The correct answer is Both gains; it is a win-win situation. It is a type of transaction where two parties freely trade goods or services.