Objects in and of themselves have no costs. Lunches are an object, so they presumably have no cost. Yet we often hear economists say, "There is no such thing as a free lunch." Are economists being inconsistent?
A) It is impossible to tell.
B) Yes, if the statement implies lunch actually has a cost.
C) No, if the statement implies the decision to offer lunches free of charge entails the sacrifice of scarce resources, which could have served other useful purposes.
D) Both B and C are true.
D
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An economy that grows in world interdependence experiences
(a) growing trade on the basis of comparative advantage. (b) more vulnerability to the business cycles of trading partners. (c) wealth accumulation. (d) all of the above.
Which of the following is not an advantage of risk pooling?
A) By insuring large groups as opposed to individuals, health insurance providers reduce adverse selection. B) It gives very sick people in the group the same access to health care and to pay the same premiums as healthy individuals. C) It is easier for an insurance company to estimate the average number of claims likely to be filed under a group policy than it is to predict the number of claims likely to be filed under an individual policy. D) Individuals who are insured and therefore do not have to pay the full cost of health care services may be inclined to over-use those services.