In Economics, the Statement, "There Is No Such Thing as a Free

question 142

Multiple Choice

In economics, the statement, "There is no such thing as a free lunch," refers to which of the following?

• A) Individuals must always pay personally for the lunch they consume.
• B) Production of a good requires the use of scarce resources regardless of whether it is supplied free to the consumers.
• C) Restaurant owners would never give away free lunches.
• D) All good theories are testable.

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Definitions:

Long-Run Supply Function

A relationship indicating the quantity of a good or service that producers are willing to make available in the market over a long period, considering all inputs are variable.

Long-Run Total Cost

The sum of all costs incurred by a firm in the production of goods or services when all inputs are considered variable in the long term.

Profit Maximization

The process of determining the best output and pricing levels to achieve the most profit.

Production Function

An equation in mathematics that outlines how inputs correlate with the greatest output achievable from those inputs.