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If a large share of output consists of goods that deteriorate quickly and provide little consumer satisfaction what problem arises despite equal GDP?

Answer and explanation

Correct answer: GDP does not fully reflect differences in utility and durability

GDP applies market prices to measured final output; it does not directly measure the satisfaction, quality, durability, or usefulness consumers obtain from that output. Therefore two economies with equal GDP can provide different welfare when one produces short-lived, low-utility goods. Option A states this limitation. B is false because GDP includes many nondurable goods, while C and D incorrectly equate utility with price.

Related tags

Consumer UtilityDurabilityGdp LimitationsGdp And WelfareNational Income And Related AggregatesEconomicsClass 11 Mcq

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