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If industrial output rises but noise pollution increases greatly which cost is not fully reflected in GDP?

Answer and explanation

Correct answer: Social cost to health and peace of mind

The governing concept is a negative externality: production can impose costs on nearby people without a complete market payment to them. Noise may cause stress, poor sleep, reduced concentration, and health damage, so its social cost is not fully recorded in the value of industrial output. Option D is correct. Wages, raw materials, and machinery are ordinary production costs more directly included in market transactions.

Related tags

Noise PollutionNegative ExternalitySocial CostGdpGdp And WelfareNational Income And Related AggregatesEconomicsClass 11 Mcq

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