1. Why Do People Trade?

2. Why do people trade? They expect to benefit (or gain) from it.
Trade is exchange of goods and services.
When one party does not see a benefit, they will stop trading.
Both parties benefit from voluntary trade – one of the most important concepts in economics!
Basis for idea of free trade among individuals, businesses & countries.

3. Reasoning for trade . . .
People judge satisfaction from a trade by weighing the expected benefits against the expected costs.
Different people place different marginal values on goods/services, making benefits from trade possible.
Voluntary exchange can make both individuals and nations better off . . .