ECONOMICS
INCENTIVES
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Sellers are forced to sell goods for a cheap price and can’t make a profit
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The exchange of profits between countries.
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The exchange of goods between countries.
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Trading or selling goods or services freely based on the price you want.
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Detailed explanation-1: -Definition: A voluntary exchange is a transaction where parties trade goods or services freely, with no coercive or restrictive force involved. In other words, both parties are willing and able to exchange items as they wish.
Detailed explanation-2: -What is voluntary exchange? 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-3: -Voluntary exchange is a transaction where two people trade goods or services freely, there is no coercive or restrictive force involved in the transaction. Both parties want to make the exchange items, and both parties will benefit from the trade. Voluntary exchange is an essential concept in the free market economy.
Detailed explanation-4: -For example: If you own a tulip farm and sell tulips at a farmer’s market, you are voluntarily exchanging your time and expertise for money, and consumers are exchanging money for your goods and services. Both parties, you and the consumers, are better off because of the exchange.
Detailed explanation-5: -A voluntary trade is one in which both parties gain an individual benefit from making the exchange. A person who selects a TV at an electronics store and purchases it is gaining a TV that is more valuable to them than the money they spent on it.