The phrase, “There is no such thing as a free lunch,” means a. even people on welfare have to pay for food. b. the cost of living is always increasing. c. people face tradeoffs. d. all costs are included in the price of a product.
The correct answer and explanation is:
Correct Answer: c. people face tradeoffs
The phrase “There is no such thing as a free lunch” is a well-known expression in economics. It means that it is impossible to get something for nothing. Even if something appears to be free, there is always a hidden cost or opportunity cost involved. The phrase highlights the fundamental concept of tradeoffs.
In every decision, people must choose between different options, and choosing one thing means giving up something else. For example, attending a free seminar may cost no money, but the time spent there could have been used for working, studying, or resting. That time is an opportunity cost. This concept applies to individuals, businesses, and governments. Resources such as time, money, and labor are limited, so choices must be made carefully.
Economics is based on the idea that scarcity forces people to make decisions, and every decision involves a tradeoff. If a government offers “free” education, it still needs to be funded by taxpayers. If a business gives away a “free” product, it may be covering the cost by raising the price of other items or by collecting user data. The cost is just not paid directly in money by the receiver.
This phrase teaches that nothing is truly free. It encourages people to think critically about what they are giving up whenever they make a choice. Understanding this principle is key to making informed and responsible economic decisions. Therefore, the correct answer is people face tradeoffs, as it best captures the meaning behind the phrase “There is no such thing as a free lunch.”