If the availability of goods rises but access to safe drinking water falls, what can be concluded about welfare?
Answer and explanation
Correct answer: The welfare outcome may be mixed
Welfare is multidimensional, so opposing changes must be considered together. Greater availability of goods may improve consumption possibilities, but reduced access to safe drinking water can increase disease, medical costs, and insecurity. Without information about the relative size of these benefits and harms, welfare cannot be declared definitely higher or doubled. GDP can still be measured because it records economic production. Therefore option C is the appropriate conclusion.
Frequently asked questions
What is the correct answer to this question?
The welfare outcome may be mixed
Why is this the correct answer?
Welfare is multidimensional, so opposing changes must be considered together. Greater availability of goods may improve consumption possibilities, but reduced access to safe drinking water can increase disease, medical costs, and insecurity. Without information about the relative size of these benefits and harms, welfare cannot be declared definitely higher or doubled. GDP can still be measured because it records economic production. Therefore option C is the appropriate conclusion.
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.
