An industrial project raises output but displaces a local community. How should welfare be assessed?
Answer and explanation
Correct answer: उत्पादन लाभ और विस्थापन की सामाजिक लागत दोनों देखकर
GDP captures the value of additional market production, but it is not a complete social welfare account. A welfare assessment should compare the project’s output and income gains with displacement, lost livelihoods, disruption, and other social costs. Hence option D is correct. Option A counts only the benefit, B counts only one financial cost, and C wrongly ignores a major consequence.
Frequently asked questions
What is the correct answer to this question?
उत्पादन लाभ और विस्थापन की सामाजिक लागत दोनों देखकर
Why is this the correct answer?
GDP captures the value of additional market production, but it is not a complete social welfare account. A welfare assessment should compare the project’s output and income gains with displacement, lost livelihoods, disruption, and other social costs. Hence option D is correct. Option A counts only the benefit, B counts only one financial cost, and C wrongly ignores a major consequence.
Which subject and chapter does this question cover?
This is a Class 11 Economics question. Chapter: National Income and Related Aggregates. Topic: GDP and Welfare.
