The statement that "there is no such thing as a free lunch" means:
A) there are no tradeoffs between economic goals.
B) any production requires the use of scarce resources, and thus the sacrifice of another alternative.
C) choices need not be made in rational behavior.
D) scarcity only exists in poor societies.
Answer: B) any production requires the use of scarce resources, and thus the sacrifice of another alternative.
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In the above figure, the economy is initially at point B. If the Fed increases the quantity of money, there is
A) a movement to point C. B) a movement to point A. C) a shift to AD2. D) a shift to AD1.
A firm's labor demand curve is also its marginal revenue product curve. For both the perfectly competitive firm and the output price maker, the labor demand curve slopes downwards
However, there is a difference in the reasons why the labor demand curve slopes downwards. What is this difference?