Google
Friday 
July 20, 2018 

AmosWEB means Economics with a Touch of Whimsy!

AmosWEBWEB*pediaGLOSS*aramaECON*worldCLASS*portalQUIZ*tasticPED GuideXtra CrediteTutorA*PLS
PHYSICAL FLOW: In the circular flow, the counter-clockwise transfer of goods and services from the business sector to the household sector and the transfer of resource services from the household sector to the business sector. The payment flow moves in the opposite direction. The physical flow, the physical movement of goods and services, is the foundation of the economy's circular flow. The fundamental problem of scarcity is addressed by physically transforming scarce resources into goods and services that are then used to satisfy wants and needs.

Visit the GLOSS*arama


VOLUNTARY EXCHANGE:

The process of willingly trading one valuable commodity (good, service, or resource) for another. The key term is "willingly," which distinguishes voluntary exchanges from involuntary exchanges, such as those created by government taxes. Voluntary exchanges are the foundation of market transactions.
Market transactions rely on voluntary exchanges. Buyers voluntarily trade money for a good and sellers voluntary trade a good for money. Neither buyers nor sellers are forced to engage in the exchange. They do so of their own free will.

A Voluntary Exchange

Suppose, for example, that Edgar Millbottom, Shady Valley's resident teenage musical connoisseur, has come across a shoebox full of classic 8-track tapes, containing the memorable works of Englebert Humperdink, while rummaging through his attic. Because Edgar's musical tastes run more in the direction of rock groups like Live Headless Squirrels, he is willing and able to part with these 8-track treasures. A few phone calls, a newspaper ad, and some flyers at the mall, produce an interested party, Pollyanna Pumpernickel, who happens to be a die-hard Humperdink fan.

Edgar and Pollyanna are prime candidates for a voluntary exchange; a voluntary exchange that is beneficial to both. Edgar gives up his dust-collecting shoebox of Humperdink 8-track tapes and receives a modest monetary payment. His living standard ratchets up a notch or two. Pollyanna also benefits from this exchange. She parts with a modest monetary payment and receives a treasured set of Englebert Humperdink 8-track tapes.

Voluntary for Both

This voluntary exchange only happens if BOTH sides are agreeable. Should Edgar develop a liking for Humperdink music and is not willing to part with these items, then the exchange does not happen. If Pollyanna finds other uses for the modest monetary payment, such as repairing the hole in her roof created by an exploding hot water heater, then the exchange does not happen. Unless BOTH sides want the exchange, it does not happen.

<= VERY SHORT RUN, MICROECONOMICSVOTING PARADOX =>


Recommended Citation:

VOLUNTARY EXCHANGE, AmosWEB Encyclonomic WEB*pedia, http://www.AmosWEB.com, AmosWEB LLC, 2000-2018. [Accessed: July 20, 2018].


Check Out These Related Terms...

     | market | exchange | competition | competitive market |


Or For A Little Background...

     | allocation | three questions of allocation | price | quantity | efficiency |


And For Further Study...

     | division of labor | private sector | capitalism | ownership and control | property rights | invisible hand | free enterprise | specialization |


Search Again?

Back to the WEB*pedia


APLS

ORANGE REBELOON
[What's This?]

Today, you are likely to spend a great deal of time flipping through the yellow pages seeking to buy either looseleaf notebook paper or a three-hole paper punch. Be on the lookout for attractive cable television service repair people.
Your Complete Scope

This isn't me! What am I?

The word "fiscal" is derived from a Latin word meaning "moneybag."
"There is no point at which you can say, „Well, I'm successful now. I might as well take a nap.¾"

-- Carrie Fisher, actress, writer

NCUA
National Credit Union Administration
A PEDestrian's Guide
Xtra Credit
Tell us what you think about AmosWEB. Like what you see? Have suggestions for improvements? Let us know. Click the User Feedback link.

User Feedback



| AmosWEB | WEB*pedia | GLOSS*arama | ECON*world | CLASS*portal | QUIZ*tastic | PED Guide | Xtra Credit | eTutor | A*PLS |
| About Us | Terms of Use | Privacy Statement |

Thanks for visiting AmosWEB
Copyright ©2000-2018 AmosWEB*LLC
Send comments or questions to: WebMaster