Please explain in economic terms the saying "there is no such thing as a free lunch."
3 Answers | Add Yours
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.
This can be explained by scarce resources which are limited to satisfy our unlimited wants.Therefore if the resources were limited there would be no economics hence there is no free lunch. Since there is scarce resources you have to choose the best alternative and give up another you like. Also the concept of opportunity cost brings up the concept of 'there is no free lunch' since it involves the cost of foregone alternative that is given un up hence you have to make a choice among the many alternatives
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
We’ve answered 319,199 questions. We can answer yours, too.Ask a question