Students often confuse "free of charge" with a "free good." In economics, if producing or consuming a good requires giving up something else (opportunity cost), it remains an economic good even if the price is $0. Correct Answer & Rationale
To master this topic for DSE or historical review, focus on these criteria: hkcee 2010 econ paper 2 q2
A price of $0 does not mean the cost is $0. Students often confuse "free of charge" with a "free good
An economic good is any good where the quantity demanded exceeds the quantity supplied at zero price. it is scarce.
If more than one person wants the same unit of a good, it is scarce.
Students often confuse "free of charge" with a "free good." In economics, if producing or consuming a good requires giving up something else (opportunity cost), it remains an economic good even if the price is $0. Correct Answer & Rationale
To master this topic for DSE or historical review, focus on these criteria:
A price of $0 does not mean the cost is $0.
An economic good is any good where the quantity demanded exceeds the quantity supplied at zero price.
If more than one person wants the same unit of a good, it is scarce.