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

1. A

   the opportunity cost is zero.

   (a) Opportunity cost is zero. Free-to-user is not free-to-society; resources still have alternative uses. This is not the key.

2. B

   the opportunity cost is ignored.

   (b) Opportunity cost is ignored. Good public accounting should not ignore it; the economic cost still exists. This is not the key.

3. C

   the opportunity cost is transferred from the consumers of the product to the tax-paying public.

   (c) Opportunity cost is transferred from the consumers of the product to the tax-paying public. (c) Official key: If government supplies a good at zero price, taxpayers (or other public funds) bear the real resource cost that consumers no longer pay. That transfer is the stored key.

4. D

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

   (d) Opportunity cost is transferred to the Government. The Government is an agent; the burden falls on the public that finances it, not on a costless entity called Government. This is not the key.

Summary. Official key is (c). A zero user-price does not erase opportunity cost; it shifts it onto taxpayers. The cost is neither zero nor merely ‘ignored’, nor parked on government as if government were not funded by the public. Honour the stored letter (c).