ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -A free good is a good that is not scarce, and therefore is available without limit. A free good is available in as great a quantity as desired with zero opportunity cost to society.

Detailed explanation-2: -Free goods have a zero-opportunity cost which means that the marginal cost of supplying an extra unit is zero.

Detailed explanation-3: -If there is no opportunity cost in consuming a good, we can term it a free good. For example, if you breathe air, it doesn’t reduce the amount available to other people – there is no opportunity cost.

Detailed explanation-4: -Opportunity cost refers to what you have to give up to buy what you want in terms of other goods or services. When economists use the word “cost, ” we usually mean opportunity cost. The word “cost” is commonly used in daily speech or in the news.

Detailed explanation-5: -An economic good is a good or service that has a benefit (utility) to society. Also, economic goods have a degree of scarcity and therefore an opportunity cost. This is in contrast to a free good (like air, sea, water) where there is no opportunity cost – but abundance.