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Chapter 1: Problem 11

A friend pays for your lunch. Is this an example of a free lunch? Why or why not?

Short Answer

Expert verified
No, this is not an example of a free lunch. Even though the person consuming the meal may not have paid any money, the meal itself was not free because the friend paid for it.

Step by step solution

01

Understand the Situation

Here, it is important to focus on the details of the situation. A friend is paying for the lunch, which means money is still being used to cover the cost of the meal. It may not be coming out of the person's pocket, but it is still being paid for by someone.
02

Apply Economic Concept

Economic concept states 'there's no such thing as a free lunch'. It implies that even if something seems to be free, there is always a cost, even if that cost does not have to be paid by the person receiving the benefit. Here, the cost of the lunch is being covered by the friend. So, according to this economic principal, it's not a free lunch.
03

Conclusion

Based on the above analysis, it can be concluded that even if a friend pays for lunch and it did not cost anything to the person who ate the lunch, it is not an example of a free lunch because the friend bears the cost of the lunch. The cost, even though it's not paid by the person consuming the lunch, is still present and hence, it's not a 'free lunch' in economic terms.

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