"The cook is cooking a cheap lunch."
Translation:Kucharz gotuje tani obiad.
It is both. Like some people eat "lancz" or "obiad" at work around 13.00 and early "kolacja" after they come back at 18.00. And at schools people eat "obiad" around 12/13.
Obiad is the main meal of the day, usually eaten around midday (12AM to 4PM). It is usually translated as lunch (because of the time of the day when it is eaten), sometimes as dinner (since it is the main meal which is often eaten socially – with family members, in a restaurant etc.)
Kolacja is a medium-sized evening meal, usually eaten between 6PM and 9PM. Again, since the conventions for naming a meal of this kind in English vary, it can be translated in two ways: as dinner or supper.https://www.duolingo.com/skill/pl/Food-1