Economy
2018
Basic Economic Terms
Government Schemes
If a commodity is provided free to the public by the Government, then
A.The opportunity cost is zero.
C.The opportunity cost is transferred from the consumers of the product to the tax- paying public.
B.The opportunity cost is ignored.
D.The opportunity cost is transferred from the consumers of the product to the Government.
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 · 2022Which of the following statements is/are correct regarding the Monetary Policy Committee (MPC)?Economy · 2017The Service Area Approach was implemented under the purview ofEconomy · 2019The money multiplier in an economy increases with which one of the following?Economy · 2021Consider the following statements:Economy · 2015With reference to Indian economy, demand-pull inflation can be caused/increased by which of the foll...Economy · 2021