Some stores give “free” products to consumer. An economist would say the products are not free. Why the difference?
Please provide the best answer for the statement.
The products may be given free to the consumers for marketing purposes, such as to attract customers to the store. The products, however, are not free to the store. Scarce resources had to be used to produce the “free” products and those resources had to be paid for by the store. Ultimately, whenever a product (food, brochure, toy) is given away free by a business to a consumer, the business still had to pay for the product because scarce resources were required to produce it.
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Willingness to pay:
A) is the lowest price that a buyer is willing and able to pay for a unit of good. B) is the highest price that a buyer is willing and able to pay for a unit of good. C) is equal to the price of the lowest-priced goods in a consumption bundle. D) is equal to the price of the highest-priced goods in a consumption bundle.
Refer to Figure 2-5. If the economy is currently producing at point X, what is the opportunity cost of moving to point W?
A) 19 million tons of steel B) 5 million tons of paper C) 9 million tons of paper D) 3 million tons of steel