If factory output rises but workers experience more illness and less leisure what conclusion is appropriate?
Answer and explanation
Correct answer: GDP may rise while worker welfare declines
The governing concept is the difference between measured market output and overall welfare. Greater factory production raises the value of goods recorded in GDP, but illness imposes health costs and reduced leisure lowers workers' quality of life. These effects may not be fully deducted from GDP. Therefore option A is correct. The other choices either assume welfare must follow output or deny the relevance of health and leisure.
Frequently asked questions
What is the correct answer to this question?
GDP may rise while worker welfare declines
Why is this the correct answer?
The governing concept is the difference between measured market output and overall welfare. Greater factory production raises the value of goods recorded in GDP, but illness imposes health costs and reduced leisure lowers workers' quality of life. These effects may not be fully deducted from GDP. Therefore option A is correct. The other choices either assume welfare must follow output or deny the relevance of health and leisure.
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.
