Government subsidy for essential consumption Steps:

• Identify the scenario: Government provides free food to poor households, intervening to ensure access.
• Recall economic classifications: Free goods are non-scarce; public goods are non-excludable/non-rival; merit goods are underconsumed essentials subsidized by government; normal goods have positive income elasticity.
• Match the intervention: This targets underconsumption of vital nutrition due to poverty, fitting merit goods like subsidized healthcare or education.
• Eliminate mismatches: Not free/public as food is scarce/rivalrous; not normal as it describes provision, not demand response.

Why C is correct:

• Merit goods are defined as items society values for welfare (e.g., basic food), provided free/subsidized to correct market failure in consumption.

Why the others are wrong:

• A: Free goods have zero opportunity cost (e.g., air), but food requires production/resources.
• B: Public goods benefit all without exclusion (e.g., defense), but food is rivalrous and targeted.
• D: Normal goods see demand rise with income, unrelated to government free provision.

Final answer: C. a merit good