Suppose Country A has higher real GDP per capita than Country B but much poorer access to health and education. What is the correct conclusion?
Answer and explanation
Correct answer: Overall welfare cannot be determined from GDP per capita alone
GDP per capita measures average market production or income, but economic welfare is broader. Health, education, environmental quality, leisure, income distribution and access to public services also affect well-being. Thus Country A’s higher real GDP per person does not prove higher welfare, especially when its health and education outcomes are much poorer. Option B is also unjustified because Country B may have substantial welfare.
Frequently asked questions
What is the correct answer to this question?
Overall welfare cannot be determined from GDP per capita alone
Why is this the correct answer?
GDP per capita measures average market production or income, but economic welfare is broader. Health, education, environmental quality, leisure, income distribution and access to public services also affect well-being. Thus Country A’s higher real GDP per person does not prove higher welfare, especially when its health and education outcomes are much poorer. Option B is also unjustified because Country B may have substantial welfare.
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.
