PYQ 2018 Q47 · RaahUPSC PYQ

2018 · EconomyPrevious Year Question

Q47.

If a commodity is provided free to the public by the Government, then

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.

D. the opportunity cost is transferred from the consumers of the product to the Government.

Answer

C

Explanation

Opportunity cost does not disappear when a commodity is provided free. When the Government provides a commodity free, the opportunity cost is transferred from the consumers of the product to the tax-paying public who fund the government expenditure through taxes.