Logout Open In App
Open In App
Warning: foreach() argument must be of type array|object, bool given in /var/www/html/web/app/themes/studypress-core-theme/template-parts/header/mobile-offcanvas.php on line 20

Chapter 3: Q.50 (page 79)

Explain why voluntary transactions improve social welfare.

Short Answer

Expert verified

Voluntary transactions benefit both buyers and sellers after the transaction is completed.

Step by step solution

01

Definition

Social Welfare: Social welfare refers to a variety of support programs designed to promote a state's people's overall well-being by providing high-quality care to individuals and society as a whole. A good program investigates the problems of the population first, then proposes answers to the problems revealed in the study dynamics. The government of the United States has a number of programs and policies in place to assist persons who are poor.

02

Explanation

Voluntary transactions promote societal welfare by allowing sellers and buyers to freely participate in the market. Voluntary transactions allow the consumer's desire to shine through because they have the option to accept or refuse the transaction. Voluntary transactions also give sellers the option to refuse transactions if they so desire. As a result, voluntary transactions boost social welfare by putting both the seller and the buyer in a better position following the transaction.

Unlock Step-by-Step Solutions & Ace Your Exams!

  • Full Textbook Solutions

    Get detailed explanations and key concepts

  • Unlimited Al creation

    Al flashcards, explanations, exams and more...

  • Ads-free access

    To over 500 millions flashcards

  • Money-back guarantee

    We refund you if you fail your exam.

Start your free trial

Over 30 million students worldwide already upgrade their learning with Vaia!

One App. One Place for Learning.

All the tools & learning materials you need for study success - in one app.

Get started for free

Most popular questions from this chapter

A low-income country decides to set a price ceiling on bread so it can make sure that bread is affordable to the poor. Table 3.11 provides the conditions of demand and supply. What are the equilibrium price and equilibrium quantity before the price ceiling? What will the excess demand or the shortage (that is, quantity demanded minus quantity supplied) be if the price ceiling is set at \(2.40? At \)2.00? At $3.60?

Review Figure 3.4 again. Suppose the price of gasoline is \(1.00. Will the quantity demanded to be lower or higher than at the equilibrium price of \)1.40 per gallon? Will the quantity supplied be lower or higher? Is there a shortage or a surplus in the market? If so, of how much?

Use the four-step process to analyze the impact of a reduction in tariffs on imports of iPods on the equilibrium price and quantity of Sony Walkman-type products.

Table 3.8 shows the information on the demand and supply for bicycles, where the quantities of bicycles are measured in thousands.

a. What is the quantity demanded and the quantity supplied at a price of \(210?

b. At what price is the quantity supplied equal to 48,000?

c. Graph the demand and supply curve for bicycles. How can you determine the equilibrium price and quantity from the graph? How can you determine the equilibrium price and quantity from the table? What are the equilibrium price and equilibrium quantity?

d. If the price was \)120, what would the quantities demanded and supplied be? Would a shortage or surplus exist? If so, how large would the shortage or surplus be?

Use the four-step process to analyze the impact of the advent of the iPod (or other portable digital music players) on the equilibrium price and quantity of the Sony Walkman (or other portable audio cassette players).
See all solutions

What do you think about this solution?

We value your feedback to improve our textbook solutions.

Study anywhere. Anytime. Across all devices.

Sign-up for free