Chapter 3R, Problem 3CTQ

To determine

The question requires us to determine the GDP, welfare, and joy in the given situation, and also determine the relationship between income, GDP, and happiness.

Explanation of Solution

In 2019, the person adds the most to GDP as she spent $125,000 on treatment.

According to the given scenarios, she did experience the most joy after winning a gold medal at the World Track Championship in 2017.

During her treatment of cancer when she spent $125,000, her personal welfare did reach its lowest point.

Higher income along with some big achievements can give happiness, but the higher value of GDP doesn’t say anything about happiness.

Economics Concept Introduction

GDP is the measurement of final goods and services produced in an economy in a financial year.

GDP tells us about the growth in national income, level of production, and per capita income. It indicates the economic growth in a nation in quantitative terms, but it doesn’t say anything about the quality or health of an economy because GDP doesn’t include the level of happiness, poverty, inequality, level of education, health, technologies, research & developments, and so on. The value of GDP even doesn’t include the work done by housewives and underground economic activities.