Which of the following describes free goods?

Free goods are defined as goods or services that are available in such abundance that they are not subject to scarcity, meaning they can be consumed without a direct cost and typically have a zero market price. These goods are not allocated through market mechanisms because they are readily available to everyone without limitations; common examples include air and sunlight.

The characterization of free goods primarily revolves around their unlimited supply and the absence of a market price, which aligns perfectly with the description provided in the chosen answer. The other options do not capture the essence of what free goods are:

• Items that have a marginal cost indicate that there is some cost associated with their production, which contradicts the idea of free goods.

• Resources limited by market demand suggest a scarcity that is contrary to the concept of free goods since such resources are not freely available to all.

• Products that require extensive investment imply that there is a significant cost to produce them, which again does not align with the definition of free goods.

Thus, the chosen answer effectively captures the nature of free goods as being those that are abundantly available without a cost, which is the defining characteristic.