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?

Question

Quizplus · Accepted Answer

The Answer is 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.

Assume That You Have Heard News That a Local Radio