Economy
2018
Basic Economic Terms
Government Schemes
If a commodity is provided free to the public by the Government, then
D.The opportunity cost is transferred from the consumers of the product to the Government.
A.The opportunity cost is zero.
B.The opportunity cost is ignored.
C.The opportunity cost is transferred from the consumers of the product to the tax- paying public.
Correct Answer: Option C
Opportunity cost is the value of the next best alternative when a choice is made. It represents the potential benefits an individual, investor, or business misses out on when choosing one alternative over another.
When the government provides a commodity for free, it is not truly free. The resources used to provide that commodity could have been used for something else. This 'cost' is ultimately borne by the tax-paying public who fund government expenditures.
Therefore, the opportunity cost is transferred from the consumers of the product to the tax-paying public.
More Economy Questions
Which one of the following is the main objective of the ‘Make in India’ initiative?Economy · 2015With reference to the Indian economy, "Collateral Borrowing and Lending Obligations" are the instrum...Economy · 2024In the context of any country, which one of the following would be considered as part of its social ...Economy · 2019Which one of the following is likely to be the most inflationary in its effects?Economy · 2021With reference to the Indian economy, consider the following statements:Economy · 2022