What do economists mean when they say that there is no such thing as a free lunch?
What will be an ideal response?
Everything has a cost, even when you do not pay money for it. Suppose that somebody bought you lunch. Resources from the economy were used to make that lunch, even though those resources may not belong to you. Consequently, the economy gave up anything else it could have made with the resources it used to make the lunch. The opportunity cost of that lunch is the lost opportunity to use those resources in some other way.
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If the price is above the equilibrium price, then there is a
A) surplus, and market forces will operate to lower price. B) surplus, and market forces will operate to raise price. C) shortage, and market forces will operate to lower price. D) shortage, and market forces will operate to raise price.
What does the Gauss-Markov theorem prove? Without giving mathematical details, explain how the proof proceeds. What is its importance?
What will be an ideal response?