The assertion that "There is no free lunch" means:
A)there are always tradeoffs between economic goals.
B)all production involves the use of scarce resources and thus the sacrifice of alternative goods.
C)marginal analysis is not used in economic reasoning.
D)choices do not need be made if behaviour is rational.

Question

Quizplus · Accepted Answer

The phrase "There is no free lunch" is based on the principle of opportunity cost - the idea that when resources are used for one purpose, they cannot be used for another. Therefore, all production involves the sacrifice of alternative goods, making option B the correct choice. Option A is closely related to option B, but it is not as accurate as not all tradeoffs involve economic goals. Option C is inaccurate as marginal analysis is used extensively in economic reasoning. Option D is false as rational behavior implies making choices based on available options.

The Assertion That "There Is No Free Lunch" Means