When goods are available in an economy free of charge,
A)market forces cannot be used to allocate resources.
B)too many of these goods will be produced since there is no cost of production.
C)the product will have no value for the majority of the population.
D)the goods can only be luxury goods.

Question

Quizplus · Accepted Answer

When goods are available for free, market forces cannot be used to determine how the resources should be allocated to their production, as there is no price mechanism. This makes it difficult to determine whether the goods are being produced efficiently or not.

When Goods Are Available in an Economy Free of Charge