The Assertion That "There Is No Free Lunch" Means That

question 277

Multiple Choice

The assertion that "there is no free lunch" means that

• A) there are always trade-offs between economic goals.
• B) all production involves the use of scarce resources and thus the sacrifice of alternative goods.
• C) marginal analysis is used in economic reasoning.
• D) choices need not be made if behavior is rational.

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Definitions:

Interest

The cost of borrowing money or the payment received for the investment of money, typically expressed as a percentage of the principal.

Maturity Value

Maturity Value is the amount payable to an investor at the maturity date of a financial instrument, typically including the principal and the interest.

Note Receivable

A written promise to pay a specified amount, usually interest-bearing, that is recognized as an asset on the lender's balance sheet.

Promissory Notes

Written promises to pay a specified sum of money to a certain person or entity at a defined time or on demand.