If two countries have equal real per capita income but the first has a much higher crime rate, which is likely to have greater welfare?
Answer and explanation
Correct answer: The second country
Real per capita income measures average purchasing power after allowing for price changes, but welfare also depends on non-income conditions. A high crime rate can reduce personal safety, freedom, mental well-being, and quality of life. Since the second country has the lower crime rate while income is equal, it is more likely to have greater welfare; therefore option B is correct. Equal income does not guarantee equal welfare, so C is too strong.
Frequently asked questions
What is the correct answer to this question?
The second country
Why is this the correct answer?
Real per capita income measures average purchasing power after allowing for price changes, but welfare also depends on non-income conditions. A high crime rate can reduce personal safety, freedom, mental well-being, and quality of life. Since the second country has the lower crime rate while income is equal, it is more likely to have greater welfare; therefore option B is correct. Equal income does not guarantee equal welfare, so C is too strong.
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.
