Question : Which of the following is an example of a non-market transaction?
Option 1: Sale of a car by a dealership
Option 2: Purchase of groceries by a household
Option 3: Payment of rent by a tenant
Option 4: Transfer payment by the government
Correct Answer: Transfer payment by the government
Solution : The correct answer is (d) Transfer payment by the government.
A non-market transaction refers to an economic activity that does not involve the exchange of goods or services for money or any other form of payment. It typically involves transfers of resources or income without any corresponding market transaction.
Among the options provided, a transfer payment by the government (option d) is an example of a non-market transaction. Transfer payments are payments made by the government to individuals, households, or other entities without receiving any goods or services in return. Examples of transfer payments include social welfare benefits, pensions, grants, subsidies, and scholarships.
