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

1. A. the opportunity cost is zero.
2. B. the opportunity cost is ignored.
3. C. the opportunity costs is transferred from the consumers of the product to the tax-paying public.
4. D. the opportunity cost is transferred from the consumers of the product to the Government.

Answer: C

Explanation

Opportunity cost is the cost of choosing one alternative over another and missing the benefit offered by the forgone opportunity, investing or otherwise. Opportunity cost refers to a benefit that a person could have received, but gave up, to take another course of action. Stated differently, an opportunity cost represents an alternative given up when a decision is made. Opportunity cost is also called the economic cost.