Which of the following statements is (or are) consistent with the view that the pie is not fixed in free markets? In every trade, there is a winner and a loser. Trade is to mutual advantage. High standards of living in free‑market economies are attributable to trade. In markets, wealth is created not just distributed or transferred. Trade maximizes the zero sum.

Question

Marlie Brandt

Business

6 January, 20:58

Which of the following statements is (or are) consistent with the view that the pie is not fixed in free markets? In every trade, there is a winner and a loser. Trade is to mutual advantage. High standards of living in free‑market economies are attributable to trade. In markets, wealth is created not just distributed or transferred. Trade maximizes the zero sum.

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Answers (1)

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Elise · Answer 1

(D) In markets, wealth is created not just distributed or transferred

Explanation:

(A) FALSE: Trade is done base on both parties agreement. Therefore there is no winner and loser, if one part felt that way it would stop trading.

(B) correct, there is mutual advantage, but it do not explain why the pie is not fixed

(C) correct, but also it do not explain the reason why the income is not fixed

(D) Correct, and the reason why the pie is not fixed. Wealth is being generated constantly with every trade. There is more wealth at more trade therefore, the pie is not fixed, the income of one people is tnot taken from the income of another people. It is generate base on his own trade. The person trade his labor force, goods and capital to receive income, it do not take it from another person.

(E) Trade maximizes the zero sum. FALSE here is no zero sum on trade. Both parties receive something, the parties trade goods for currency at a price which both agree. There is no loss