Google
Thursday 
January 26, 2023 

AmosWEB means Economics with a Touch of Whimsy!

AmosWEBWEB*pediaGLOSS*aramaECON*worldCLASS*portalQUIZ*tasticPED GuideXtra CrediteTutorA*PLS
MARGINAL COST AND MARGINAL PRODUCT: Because variable cost is largely associated with the cost of employing a variable input in the short run, it's possible to identify a connection between the marginal cost curve and the marginal product curve. In particular, the quantity of output in which marginal cost is at a minimum, is the same quantity of output produced by the variable input when the marginal product of the variable input is at a maximum. In addition, over the range of production in which the variable input experiences increasing marginal returns and marginal product increases, the marginal cost curve declines. And over the range of production in which the variable input experiences decreasing marginal returns brought on by the law of diminishing marginal returns and marginal product increases, the marginal cost curve is rising.

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, 2000-2023. [Accessed: January 26, 2023].


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

PURPLE SMARPHIN
[What's This?]

Today, you are likely to spend a great deal of time wandering around the shopping mall trying to buy either a coffee cup commemorating the 1960 Presidential election or a how-to book on fixing your computer, with illustrations. Be on the lookout for poorly written technical manuals.
Your Complete Scope

This isn't me! What am I?

During the American Revolution, the price of corn rose 10,000 percent, the price of wheat 14,000 percent, the price of flour 15,000 percent, and the price of beef 33,000 percent.
"It has been my philosophy of life that difficulties vanish when faced boldly. "

-- Isaac Asimov

MSE
Minimum Efficient Scale
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 ©2000-2023 AmosWEB*LLC
Send comments or questions to: WebMaster