Figure 16.2.2
-To be certain that exchange between people is mutually beneficial, we generally assume
A) not all people are free to enter the market at will, but once in they are free to make any offer to trade.
B) all people have complete information about each other's preferences.
C) there are no transaction costs.
D) both B and C
E) both A and B

Question

Figure 16.2.2
-To be certain that exchange between people is mutually beneficial, we generally assume
A) not all people are free to enter the market at will, but once in they are free to make any offer to trade. 
B) all people have complete information about each other's preferences. 
C) there are no transaction costs. 
D) both B and C 
E) both A and B

Quizplus · Accepted Answer

Assuming that all parties have complete information about each other's preferences and there are no transaction costs is the best way to ensure mutual benefit in an exchange. However, it is not necessary for all people to be able to freely enter the market.

Figure 16.2.2 -To Be Certain That Exchange Between People Is Mutually Beneficial