When production is efficient—at a point on the PPF—choosing to produce more of one good involves a tradeoff. But if production is inefficient—at a point inside the PPF—there is a free lunch. More of some goods and services can be produced without producing less of any others.

So “there is no such thing as a free lunch” means that when resources are used efficiently, every choice involves a tradeoff.• Because economists view people as making rational choices, they expect that resources will be used efficiently. That is why they emphasize the tradeoff idea and deny the existence of free lunches. We might sometimes get a free lunch, but we almost always face a tradeoff.

EYE on YOUR LIFE