A regional government designates a naturally occurring, pristine forest as a protected nature reserve. Previously, the forest was completely open to everyone for unlimited timber foraging and recreation without charge. Now, the government actively maintains the reserve and continues to charge a entry price of 0 to visitors to encourage conservation awareness.
Which of the following economic statements is correct regarding this scenario?
The forest was initially a free good due to the absence of private property rights, but became an economic good when government maintenance costs were incurred.
The forest is a free good after the intervention because the opportunity cost to visitors is zero when entering at a price of 000.
The forest is classified as an economic good both before and after the intervention because land is a scarce resource with alternative uses, meaning its opportunity cost is greater than 000.
The forest transitioned from a free good to a merit good because the government now manages the reserve to prevent underconsumption of recreational activities.
123 exam-style questions on AQA A Level Economics 1.1 Economic methodology and the economic problem, covering 1.1.1 Economic methodology, 1.1.2 The nature and purpose of economic activity, 1.1.3 Economic resources, 1.1.4 Scarcity, choice and the allocation of resources, and 1.1.5 Production possibility diagrams. Each one has a worked solution and a mark scheme showing where the marks go.