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A country expands free access to public parks without additional market payment. What is the possible effect on welfare and GDP?

Answer and explanation

Correct answer: Welfare may rise while GDP changes very little

Public parks provide a non-market or publicly provided amenity. Greater access can improve recreation, health, and quality of life, so welfare may rise. However, if no additional market payment or recorded production occurs, the full benefit is not added to GDP; measured GDP may change little. Thus option B is correct. Equal movement is not necessary, and the other choices contradict the likely welfare effect.

Related tags

Public-ParksPublic-GoodsNon-Market-BenefitWelfareGdp And WelfareNational Income And Related AggregatesEconomicsClass 11 Mcq

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