Two countries have equal real GDP per capita, but one has more leisure time. Other things being equal, which country may have higher welfare?
Answer and explanation
Correct answer: The country with more leisure
Real GDP per capita measures average real output or income, but it does not capture every element of quality of life. Leisure is a non-market benefit: when people have more free time, they may enjoy rest, family life, and recreation without a fall in measured income. Therefore, under the stated assumption that other conditions are equal, option B is the best answer. C is too absolute, while A and D ignore the welfare value of leisure.
Frequently asked questions
What is the correct answer to this question?
The country with more leisure
Why is this the correct answer?
Real GDP per capita measures average real output or income, but it does not capture every element of quality of life. Leisure is a non-market benefit: when people have more free time, they may enjoy rest, family life, and recreation without a fall in measured income. Therefore, under the stated assumption that other conditions are equal, option B is the best answer. C is too absolute, while A and D ignore the welfare value of 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.
