If a commodity is provided free to the public by the Government, then
Answer & explanation
Answer: (c) the opportunity cost is transferred from the consumers of the product to the tax-paying public.
Free public provision does not remove the cost. The resources used still have other uses, and the bill is met through the government budget, which taxes help to fund, so the burden moves from the user to the tax-paying public.
- ✓ (c) When goods are provided publicly, they are financed through the budget and users pay nothing directly. Tax revenue is an important part of budget receipts, so taxpayers bear the cost that consumers would otherwise have paid.
- ✗ (a) Opportunity cost is what is given up when resources are used for one purpose instead of another. Producing the commodity always uses scarce resources, so the cost cannot be zero.
- ✗ (b) The cost is not ignored in economics. It has only moved from the consumer to someone else.
- ✗ (d) The government pays for the commodity out of the budget, which is funded mainly by receipts such as taxes. The burden therefore falls on taxpayers, not on the government as a separate bearer.
Remember · Free to the user is not free to society: public provision shifts the cost from the consumer to taxpayers through the budget.
📘 Read it in NCERT: Class 12 Introductory Macroeconomics, Ch 5 (practise this chapter) · Class 12 Introductory Macroeconomics, Ch 5 (practise this chapter) · Class 12 Introductory Microeconomics, Ch 1 (practise this chapter)
Sources
- NCERT Class 12 · Introductory Macroeconomics, Chapter 5 “Public provision means that they are financed through the budget and can be used without any direct payment.”
- NCERT Class 12 · Introductory Macroeconomics, Chapter 5 “Tax revenues, an important component of revenue receipts, have for long been divided into direct taxes”
- NCERT Class 12 · Introductory Microeconomics, Chapter 1 “there is always a cost of having a little more of one good in terms of the amount of the other good that has to be forgone.”
Question and answer: UPSC's official GS Paper I (2018, Series A) — paper ↗ · answer key ↗. Explanation: Minimalist IAS, checked 30 Sept 2026 (how we verify). ·