Please answer thoroughly in paragraph form Do you agree or d

Please answer thoroughly in paragraph form.

Do you agree or disagree with this statement: \"If people are free, no exchange will take place unless both parties expect to beneft.\" What are the implications of this statement for economic growth and externalities?

Solution

ANSWER:

\"If people are free, no exchange will take place unless both parties expect to benefit\" ..AGREED

Market exchanges occur when both the parties are expecting a gain in the transaction. A free market economy provides the people a freedom to what they want instead of what a particular group thinks they ought to want; thus they hold a freedom in themselves. In free market two parties enter into exchanges as they will mutually gain, provided the transaction is bi-laterally voluntary and well-informed. If people are voluntarily entering into exchanges from which both parties expect to gain, then the market is free and freedom of exchange is maintained, thus both peoples would be better off and preventing one person from interfering with another in majority of his activities. It shows that the people will make production of those in which they benefit the most. It will enable both to make for their disadvantages and availing itself for the advantage of the other, just as the story of the blind man and lame man, however will be less concerned about the community and society.