Question

When government provide free commodity to public then opportunity cost is what?

Answer 1

Thank you for this question. Please find the answer below: 

When the government provides free commodity to public then the effect on the opportunity is the following; 

The opportunity cost is transferred from the consumers of the product to the tax-paying public.

The opportunity cost is the cost of choosing one good over the other. It is the selection of one good over the other. It is referred as the benefit the person gains by making their choice. 


 

Answer 2

When the government provides the free commodity to the public then the opportunity cost is at zero.  

Explanation:

• This is because a free good is available without limit and is not scarce. Free goods can be available in large quantities with zero opportunity costs.  

• It could be some form of work or idea that does not have a cost to it. But at times a free good is not something that comes free.  

• This can be proved by an example when a shop gives away a commodity free with the purchase of some goods.  

• In this case, the free good has utilized certain resources during its production. Hence it did not come free.

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