If mining raises output but displaces local people what should be included in welfare assessment?
Answer and explanation
Correct answer: Social and livelihood costs of displacement
The governing concept is that welfare assessment must consider social costs and externalities, not only recorded market output. Mining may increase sales, profits and tax revenue, but displacement can destroy homes, livelihoods, community ties and access to common resources. These losses should be weighed against the production gains. Thus option D is correct; the other choices consider only selected monetary benefits.
Frequently asked questions
What is the correct answer to this question?
Social and livelihood costs of displacement
Why is this the correct answer?
The governing concept is that welfare assessment must consider social costs and externalities, not only recorded market output. Mining may increase sales, profits and tax revenue, but displacement can destroy homes, livelihoods, community ties and access to common resources. These losses should be weighed against the production gains. Thus option D is correct; the other choices consider only selected monetary benefits.
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.
