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The quantity of goods remains the same but more goods are produced to meet the needs of the poor. What may happen to welfare?

Answer and explanation

Correct answer: Welfare may rise

Welfare depends not only on the total quantity of output but also on its composition and distribution. If production is increasingly directed toward food, clothing, housing, health, or other necessities for poor households, their basic needs may be met more effectively. Their living conditions and welfare can therefore improve even if aggregate output is unchanged. Option A is correct because it says “may rise”; the other options make unsupported absolute claims or wrongly dismiss composition.

Related tags

Composition Of OutputBasic NeedsSocial WelfareGdp And WelfareNational Income And Related AggregatesEconomicsClass 11 Mcq

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