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Economic Outcomes as a Result of Actor Interactions
Gains from Exchange and Trade Definition
Gains from exchange, also known as gains from trade, are the benefits that participants in a voluntary transaction receive compared to what their outcome would have been without the transaction. These gains, which motivate voluntary trade between buyers and sellers, are measured by the economic surpluses generated for the involved parties. The prospect of these gains is the primary motivation for engaging in such interactions.
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Social Science
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CORE Econ
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Introduction to Microeconomics Course
The Economy 2.0 Microeconomics @ CORE Econ
Ch.7 The firm and its customers - The Economy 2.0 Microeconomics @ CORE Econ
Ch.8 Supply and demand: Markets with many buyers and sellers - The Economy 2.0 Microeconomics @ CORE Econ
Related
Economic Model
Factual vs. Value-Based Analysis of Economic Outcomes
Allocation (in Economics)
Economic Endowment
Gains from Exchange and Trade Definition
Rules of the Game in Economic Interactions
Role of Firms in the Economy
Types of Economic Relationships: Markets, Firms, and Government
Economic Complexity as a Barrier to Understanding
The Role of 'Rules of the Game' in Economic Interactions
Analysis of a Local Market Outcome
A city experiences a severe heatwave, causing a surge in demand for air conditioners. In response, electronics stores increase their prices. The city government then introduces a subsidy for the purchase of new, energy-efficient models. Which statement best analyzes how the final price and quantity of air conditioners sold are determined in this situation?
Deconstructing an Economic Outcome
A Startup's Pricing Strategy
Match each economic outcome described below with the primary group of actors whose interactions were most influential in causing it.
The Emergence of a Price
Municipal Home Value Guarantee Program
In a market-based system, the final allocation of resources, such as the number of apartments available for rent and their prices, is determined by the deliberate plan of a central authority, like a city planning commission, rather than the cumulative effect of individual decisions made by thousands of landlords and potential renters.
A company releases a new video game. The final sales figures and market price after the first month are an economic outcome. Arrange the following events in a logical order to show how the interactions among different participants lead to this outcome.
A government official claims, "The recent increase in the national average wage for retail workers is a direct and exclusive result of our new minimum wage legislation." Based on your understanding of how economic outcomes are determined, which of the following statements provides the most accurate evaluation of this claim?
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Joint Surplus Definition
Criteria for Evaluating Gains from Exchange
Economic Rent Definition
Condition for Potential Surplus from Trade
Joel Waldfogel
Borrowing and Lending as a Source of Mutual Gain
Analyzing a Simple Transaction
Which of the following statements provides the most accurate and fundamental explanation for why two parties willingly engage in a voluntary exchange?
If two individuals agree to a voluntary trade, it logically follows that both of them must end up in a better position than they were in before the transaction took place.
Explaining the Motivation for Trade
Match each term on the left with the scenario that best illustrates it on the right. Each term describes a key aspect of a voluntary transaction.
The Rationale Behind a Simple Transaction
The primary motivation for two parties to voluntarily engage in a transaction is the prospect of achieving ______, which represents the net benefits they each receive compared to not trading at all.
A potential buyer is willing to pay a maximum of $80 for a concert ticket. A potential seller values the same ticket at $60, meaning they would sell it for any amount equal to or greater than $60. Considering only these two individuals, in which of the following situations are the potential gains from exchange NOT realized?
Calculating Benefits from a Voluntary Transaction
A student is willing to sell their used textbook for any price of $40 or more. Another student is willing to buy that same textbook for any price up to $90. If they agree on a price of $70, which of the following statements accurately describes the outcome of this transaction?
Relationship Between Economic Rent, Joint Surplus, and Gains from Trade