But there ARE free lunches!

posted by
May 31, 2011
Foundation for Economic Education
by Sandy Ikeda  
Posted in Commentary

"Suppose I’m in the business of making lunches. Let’s say that with my current know-how I can make a maximum of 20 lunches a day by using two units of labor and four units of capital. One day I discover a way to make two lunches of the exact same kind, at least from the perspective of my customers, with the same amount of inputs that it previously took to make one. In other words, before that fateful day I was selling lunches inefficiently; I was producing only half the lunches that I could have been. Discovering that inefficiency means I can create 20 additional lunches." (05/31/11)



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