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Multiple Choice Question

The concept at the core of economics that "there is no free lunch" reflects the notion that

A. the benefit of certain "free" goods only accrues to society.
B. unlimited resources are used to produce so-called "free goods."
C. the scarce resources that are used to produce the so-called "free goods" have alternative uses that are given up.
D. even if your friend pays for your lunch, you'll have to repay the favor at a later time.



Answer :

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Final answer:

Scarcity in economics emphasizes the concept that all choices involve a cost. The 'no free lunch' idea highlights the hidden costs behind seemingly free items.


Explanation:

Scarcity is a fundamental concept in economics, emphasizing that resources are limited and choices must be made. The notion that 'there is no free lunch' highlights the idea that all choices involve a cost, even if not immediately apparent. For example, receiving a 'free' item may lead to increased prices elsewhere to cover its cost.

Economists use models like the production possibilities frontier to illustrate trade-offs. These models show the limits of what can be produced given available resources. The opportunity cost of any choice is the value of the best alternative forgone.


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