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asdfghjhgfdsa
asdfghjhgfdsa
Student
College - Sophomore

Please explain in economic terms the saying "there is no such thing as a free lunch."

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Posted by asdfghjhgfdsa on Friday October 23, 2009 at 11:57 AM and tagged with business, economics.

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  1. pohnpei397 Teacher
    Community / Jr. College

    eNotes Editor

    The idea that there is no such thing as a free lunch is an illustration of a couple of the basic ideas of economics -- that of scarcity, and that of opportunity cost.

    The idea of scarcity says that every resource on earth is limited in comparison to people's unlimited desires.  Therefore, everything has a price because people have to compete for resources. So even if they say the lunch is free, it isn't because everything has a price.

    The other, and connected, idea is that of opportunity cost.  Whenever you choose to do something, you give up the ability to do something else at the same time.  So, if someone uses grain to feed cows to make the hamburger for your free lunch, they lost the opportunity to use that grain for something else.  And that's another cost of the lunch.

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    Posted by pohnpei397 on Friday October 23, 2009 at 12:11 PM

  2. grgsiocl
    grgsiocl Teacher

    The economic theory, and also the lay opinion, that whatever goods and services are provided, they must be paid for by someone - i.e. you don't get something for nothing. The phrase is also known by the acronym of 'there ain't no such thing as a free lunch

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    Posted by grgsiocl on Saturday October 24, 2009 at 5:56 AM