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Two countries have equal real GDP per capita, but one has more leisure time. Other things being equal, which country may have higher welfare?

Answer and explanation

Correct answer: The country with more leisure

Real GDP per capita measures average real output or income, but it does not capture every element of quality of life. Leisure is a non-market benefit: when people have more free time, they may enjoy rest, family life, and recreation without a fall in measured income. Therefore, under the stated assumption that other conditions are equal, option B is the best answer. C is too absolute, while A and D ignore the welfare value of leisure.

Related tags

LeisureReal-Gdp-Per-CapitaQuality-Of-LifeWelfareGdp And WelfareNational Income And Related AggregatesEconomicsClass 11 Mcq

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