Two "typical" examples could be TV's and cereal. Why? Because these are two areas that almost everyone can relate to. Yet let's take a look at some facts and you will see why the cheaper option is always more costly in the long run.
Let's take a look at the TV's first. In this example, we have two tv's that look identical in every way, but one is dramatically less expensive. There are some questions that you should be asking. One, is the less expensive one hot (stolen goods). For the more expensive one is the seller gouging you? Then compare the two. What is the durability like? How long does it take before the screens wear out? How long before the colors shift? Is one a lower grade of plastic? How long will it be before replacement is needed? There arre other things to consider, but in the end it comes down to replacement. If one model has to be replaced every year (cost $300 per replacement), and the other is a beast that doesn't need replaced more that once every five years ($500 per replacement), which is the better deal? If you said the $500 set is the better deal you are absolutely correct. In the time it takes you to wear out the $500 set you will have spent $1500 on the less expensive sets to maintain the quality and durability of the more expensive set.
Food is a bit harder to pin down because there are a lot of factors to consider. Edibility, age, ingredients, price per serving, health issues, all play a part in "false economy". If you can't eat it because it tastes so awful, you are going to throw away money, or torture yourself eating it. A lot of food sits on store shelves or in a warehouse for a long time before it is sold. That is time that the food is losing freshness, flavor, and nutritional value. You might save a few cents, but what have you done to your health? There is also the issue of what goes into the food. When you buy the cheapest food you can get, you are also often getting things that you don't want. What about food combinations? Often, food for the budget conscious is sold with an ingredient in mind (or the lack of one), just to use a tiny amount of the sellable ingredient and substitute the remainder with a cheaper ingredient. The sellable ingredient of blueberries is often replaced with apple. What about the health issues of mixing and matching? I found one cereal, for instance, that combines oat and corn flours. For people with gluten issues that is very dangerous. Each of these flours contains half of the chemicals needed to create gluten. When the food is eaten, the gluten forms in the gut, and makes the person ill. I think you are getting the picture. I do have to make one more point. Choosing between modern brands and foods is now a matter of choosing between evils. Biotech is a big evil to a lot of people, but the contest now is largely between partially and completely created with biotech help. If you can find it, there are the non-gmo varieties, but are usually very expensive.
So, I have to ask; If your choice tastes so bad it hurts, violates every food belief you have, contains more imitation ingredients than not, and makes you sick in the process, how can it be a better deal? Where is the benefit? In most of the instances of economy, the savings is a few cents. The difference that a coupon can make. In reality savvy shoppers can use a combination of shopping locality, sales, and coupons to get double the mass of better quality goods for the same cost as the generic or low cost goods. In the end live better by skipping the "economic" option. If it's to good to be true, it probably is.