voluntary exchange

When individuals engage in a voluntary exchange, both parties are made better off. In the above example, Janet has the option of accepting or declining Brad’s offer of a trade. If she accepts his offer, she does so voluntarily. Janet would agree to this exchange only if she expects to be better off as a result. Because she likes tomatoes better than onions, Janet’s enjoyment of her salad will be greater with this trade than without it. On the other side, Brad has voluntarily made this offer of an exchange to Janet because Brad believes he will also be better off as a result of the exchange.
People tend to think of making, building, and creating things as productive activities.
Agriculture and manufacturing are like this. They create something genuinely new, something that was not there before. On the other hand, trade-the mere exchange of one thing for another4oes not create new material items. You might be tempted to think that if goods are merely being traded, one party will be better off and the other worse off. A closer look at the motivation for trade helps us see through this popular fallacy. Exchange takes place because both parties expect it will make them better off. If they didn’t, they wouldn’t agree to do it. For example, if Janet liked onions better than tomatoes, she wouldn’t have traded with Brad. The fact that she agreed to the trade means she thinks she has something to gain by doing so. Brad thinks the same thing when it comes to his tomatoes. In other words, because their exchange is voluntary, both Janet and Brad are made better off.