Evaluate the following statement. True or False: Since nothing new is created, there is no way the transaction can improve the welfare of people. TrueFalse

That statement is false.

Explanation:

To prove this, we can use the sale of used products as an example.

Let's say that you bought a laptops, and used it for around 3 months. But, since you don't use it too often, you decided to sell it. Even though the laptop still function almost perfectly, you decided to sell it with half-price, A poor student who need it for his study but cannot afford the laptop at full price decided To buy that laptop from you.

When we examine the scenario above, no new goods/services is created. You just sell your old laptop. But it definitely improve the life of the poor student since he can get the benefit of almost a new laptop with lower price.