In economics, the statement, "There is no such thing as a free lunch," refers to which of the following?
A) Individuals must always pay personally for the lunch they consume.
B) Production of a good requires the use of scarce resources regardless of whether it is supplied free to the consumers.
C) Restaurant owners would never give away free lunches.
D) All good theories are testable.

Question

Quizplus · Accepted Answer

The statement "there is no such thing as a free lunch" refers to the concept of opportunity cost, which is the idea that the cost of any given action is the next best alternative forgone. In other words, even if a good or service is supplied for free, there is still a cost involved because resources (such as time, labor, and materials) had to be used to produce it. Therefore, the statement is saying that there is no such thing as a truly "free" lunch (or any other good/service).

In Economics, the Statement, "There Is No Such Thing as a Free