TANSTAAFL

What do we mean by TANSTAAFL?

TANSTAAFL is short for a phrase you may have heard before -- “There ain’t no such thing as a free lunch.”

In other words, there’s always a cost to any decision.

If your favorite bakery advertises free cupcakes, are they really free? You need consider the time it takes you to drive to the bakery, wait in line, etc. These are the “costs” of the seemingly free cupcakes.

TANSTAAFL can also help explain why “fun” jobs pay lower wages than “boring” jobs. Would you rather be a sewer inspector spending your days underground or a lifeguard on the beach? Most would say that being a lifeguard is a more fun job, but a sewer inspector has higher wages to attract workers and to compensate for the not-so-fun aspects of the job. For jobs requiring equal skill and education, more fun = lower wages, and less fun = higher wages.

To learn more, see Marginal Revolution University’s Principles of Microeconomics video on The Tradeoff Between Fun and Wages.