COST ACCOUNTING
INFORMATION FOR DECISION MAKING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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You could choke on the free hamburger and have to go to the hospital.
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You must pay for everything you eat.
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Every choice involves an opportunity cost.
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There is plenty of food for everyone.
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Detailed explanation-1: -A free lunch refers to a situation where there is no cost incurred by the individual receiving the goods or services being provided, but economists point out that even if something were truly free there is an opportunity cost in what is not taken.
Detailed explanation-2: -There are two meanings of the expression, “There Ain’t No Such Thing as a Free Lunch.” The first, which is always true, is that there is scarcity, and scarcity necessitates tradeoffs. The second, which is almost always true, is that when someone offers you something “for free, ” he expects something in return.
Detailed explanation-3: -said to emphasize that you cannot get something for nothing: “I get to travel with my job but the downside is I have to give talks.” “Well, there’s no such thing as a free lunch."
Detailed explanation-4: -Economists use the phrase “There is no such thing as a free lunch, ” to illustrate the principle that making decisions requires trading off one goal against another. There is an opportunity cost of every decision that is taken. Since resources are limited in comparison to the wants, all wants cannot be fulfilled.