What happens 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)Goods are not available in market economies free of charge.

Question

Quizplus · Accepted Answer

Market forces, such as supply and demand, are based on the availability of goods and their prices. If goods are available free of charge, then market forces cannot be used to allocate resources because there is no market price to regulate supply and demand.

Answer: B
 When goods are available free of charge, there would be no incentive for producers to limit production as there are no costs of production to be covered. This could lead to overproduction, waste of resources, and inefficiencies.

Answer: C
 In an economy where goods are available free of charge, some goods may lose their value for the majority of the population because they are no longer a scarce resource. If anyone can have them for free, then they will not be seen as valuable compared to goods that are scarce and difficult to obtain.

Answer: D
 This statement is not accurate as some goods are indeed available free of charge in market economies, such as samples, giveaways, or public goods that are provided by the government. However, the availability of goods free of charge does not mean that market forces do not apply or that the goods have no value.

What Happens When Goods Are Available in an Economy Free