How can excessive exploitation of natural resources affect welfare?
Answer and explanation
Correct answer: It may raise current production while reducing future welfare
The governing concept is sustainable welfare across time. Excessive extraction may provide raw materials and increase current production, but it can deplete reserves, damage ecosystems, and reduce resources available to future generations. Thus option D gives the balanced effect. The words “always,” “no effect,” and “only” make options A, B, and C too absolute and incomplete.
Frequently asked questions
What is the correct answer to this question?
It may raise current production while reducing future welfare
Why is this the correct answer?
The governing concept is sustainable welfare across time. Excessive extraction may provide raw materials and increase current production, but it can deplete reserves, damage ecosystems, and reduce resources available to future generations. Thus option D gives the balanced effect. The words “always,” “no effect,” and “only” make options A, B, and C too absolute and incomplete.
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.
