Final answer:
A transaction involves at least two parties freely engaging in an exchange where each has something of value. Transactions facilitate market operations and can be complicated by imperfect information.
Step-by-step explanation:
A transaction involves at least two parties where:
a. each party is free to accept or reject the exchange offer,
b. each party has something that might be of value to the other, and
c. all of the above.
Transactions are fundamental to the operations of a market economy; they're facilitated by money, allowing for clear value exchange without the need for barter. Parties in a transaction typically act independently and in their self-interest, which can be moderated by the trust and mutuality established through repeated exchanges. However, transactions can be complicated by imperfect information, where the buyer or seller may not be fully certain about the qualities of what is being exchanged. Despite this, mechanisms are often put in place to ensure that transactions can still occur that are mutually beneficial.