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If the availability of goods rises but access to safe drinking water falls, what can be concluded about welfare?

Answer and explanation

Correct answer: The welfare outcome may be mixed

Welfare is multidimensional, so opposing changes must be considered together. Greater availability of goods may improve consumption possibilities, but reduced access to safe drinking water can increase disease, medical costs, and insecurity. Without information about the relative size of these benefits and harms, welfare cannot be declared definitely higher or doubled. GDP can still be measured because it records economic production. Therefore option C is the appropriate conclusion.

Related tags

Safe WaterGoods AvailabilityMixed WelfareGdp And WelfareNational Income And Related AggregatesEconomicsClass 11 Mcq

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