Voluntary exchange increases economic efficiency
A)because neither the buyer nor the seller would agree to a trade unless they both benefit.
B)because voluntary exchange only takes place with government permission.
C)because it is free and consequently does not cost anything.
D)because it allows wealthy individuals to act altruistically and give to the poor.

Question

Quizplus · Accepted Answer

Voluntary exchange only occurs when both the buyer and seller perceive that they will benefit from the transaction. This creates a more efficient allocation of resources because goods and services are allocated to those who value them the most. This is known as the principle of mutual gain, and it is the foundation of voluntary exchange.

Voluntary Exchange Increases Economic Efficiency