Question

Alex, a college student, is walking by Phil's home one afternoon. He sees Phil, an elderly man, get his riding lawnmower out, ready to cut his grass which is a foot high. Alex offers to cut his grass if Phil agrees to pay him $50. Phil says "sure" and flips Alex the keys to his riding lawnmower and goes back inside his house. This is an example of _________.

Answer 1

Alex's agreement with Phil is an example of a market exchange, which is a common transaction among strangers in capitalist societies involving trade of goods or services for compensation.

Step-by-step explanation:

Alex's agreement to cut the grass for Phil if Phil pays him $50 is an example of a market exchange. Market exchange is the most common form of transaction among strangers in capitalist societies, where services or goods are traded for money or other compensation. In this scenario, Alex and Phil participated in a clear exchange: Alex offered his lawn-mowing service, and Phil agreed to provide monetary compensation. This is different from generalized reciprocity, which typically occurs in close relationships like family and friends and often doesn't involve an immediate or clear exchange of goods or services for money.