The per capita income in country X is considerably higher than that in country Z. Why may the citizens of country X not necessarily enjoy higher standards of living than citizens of country Z?

      

Give reasons why the citizens of country X may not necessarily enjoy higher standards of living than citizens of country Z.

  

Answers


Maurice
(i) Incomes in country X achieved at the expense of leisure.

(ii) Tastes and preferences could be different in the two countries.

(iii) The units of the currency used in the two countries could be different.

(iv) Income distribution in X may be inequitable such that it is owned by only a few individuals.

(v) Income generated could have been used in ways that do not benefit the people directly.


(vi) The income could have been generated at the expense of the health of the people through the use of inappropriate production methods.

(vii) The goods produced could have been dangerous to the health of the people for example, generating income by the production of harmful drugs.

(viii) The price level in country X could have been relatively high such that any additional incomes are eroded by the high prices.
maurice.mutuku answered the question on July 15, 2017 at 12:26


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