Assume that you have heard news that a local radio station is hosting a luncheon at your school by offering hot dogs, chips and cola at no expense to the student body. Why would economists say that this lunch is not truly free?
What will be an ideal response?
The lunch is not free for a couple of reasons. First, in order for the radio station to offer it they had to give up real resources in order to provide it. Secondly, it is likely that if the luncheon is offered at no expense to the students they will likely have to spend at least some amount of time waiting in line to get it. This time represents an opportunity cost which is not likely to be free.
You might also like to view...
If there is no Ricardo-Barro effect, an increase in the budget deficit
A) decreases the amount of investment. B) increases the supply of loanable funds. C) lowers the equilibrium real interest rate. D) increases the amount of investment. E) decreases the demand for loanable funds.
Between 1870 and 1920, the total labor force increased by threefold while
(a) the total number of people employed in agriculture increased by almost twofold and the total number of people employed in manufacturing and other non- agriculture increased fivefold. (b) the total number of people employed in agriculture increased by almost fivefold and the total number of people employed in manufacturing and other non- agriculture increased by threefold. (c) the total number of people employed in agriculture increased and the total number of people employed in manufacturing and other non- agriculture increased by threefold. (d) the total number of people employed in manufacturing and other non- agriculture increased fivefold while agriculture decreased by twofold.
When you have equity in a company, it means you:
A. own a portion of the debt obligations of a company. B. have diversified your risk by investing with a company. C. have diversified the company's risk. D. own part of a company and share in its profits.
Productivity
A. Rises when the value of output rises relative to the cost of inputs. B. Falls when the value of output rises relative to the cost of inputs. C. Falls when factors of production cost more. D. Rises when the ratio of output to input increases.