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Q51 (CDS-II/2021) Economy › Basic Concepts & National Income › Consumer theory basics Answer Verified

Which one of the following is true of a pure voluntary exchange between two parties A and B?

Result
Your answer: —  Â·  Correct: B
Explanation

A pure voluntary exchange is characterized by the mutual agreement of two parties to trade goods or services because both expect to benefit from the transaction [2]. In economic theory, such exchanges are considered a 'win-win' situation or a positive-sum game, rather than a zero-sum game where one's gain is another's loss. For trade to occur voluntarily, each party must value what they receive more than what they give up [2]. This mutual advantage is the fundamental driver of commerce and economic growth [1]. While external factors like military pressure or high transaction costs can distort terms, the 'pure' voluntary model assumes that if a transaction is not mutually beneficial, rational actors would simply not engage in it [2]. Thus, voluntary trade is inherently a win-win proposition for both parties involved.

Sources

  1. [1] FUNDAMENTALS OF HUMAN GEOGRAPHY, CLASS XII (NCERT 2025 ed.) > Chapter 8: International Trade > International Trade > p. 70
  2. [2] Themes in world history, History Class XI (NCERT 2025 ed.) > Chapter 3: Nomadic Empires > Social and Political Background > p. 63
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