What is possible if better public transport reduces private fuel sales and travel time?
Answer and explanation
Correct answer: Welfare may rise even if fuel sales decline
Market sales are only one part of welfare. Better public transport can reduce private fuel purchases while saving commuters' time, lowering congestion, and possibly reducing pollution. These benefits may improve well-being even if one component of market expenditure falls. A is therefore correct. B and D ignore the value of time and public benefits, while C incorrectly claims GDP and welfare always move together.
Frequently asked questions
What is the correct answer to this question?
Welfare may rise even if fuel sales decline
Why is this the correct answer?
Market sales are only one part of welfare. Better public transport can reduce private fuel purchases while saving commuters' time, lowering congestion, and possibly reducing pollution. These benefits may improve well-being even if one component of market expenditure falls. A is therefore correct. B and D ignore the value of time and public benefits, while C incorrectly claims GDP and welfare always move together.
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.
