Economics Chapter 1 – Development

1. Development of a country can generally be determined by

a. its per capita income
b. its average literacy level
c. health status of its people
d. all of the above
Answer: d. all of the above
2. Which of the following neighbouring countries has better performance in terms of
human development than India?
a. Bangladesh
b. Sri Lanka
c. Nepal
d. Pakistan
Answer: b. Sri Lanka
3. Assume there are four families in a country. The average per capita income of
these families is Rs. 5000. If the income of three families is Rs. 4,000, Rs. 7,000 and
Rs. 3,000, respectively, what is the income of the fourth family?
a. Rs. 7,500
b. Rs. 3,000
c. Rs. 2,000
d. Rs. 6,000
Answer: d. Rs. 6,000
(4000+7000+3000+x) ÷ 4 = 5000
14000+x = 5000 × 4
x = 20000-14000
x = 6000
4. What is the main criterion used by the World Bank in classifying different
countries? What are the limitations of this criterion, if any?
Answer: World Bank uses the per capita income to classify different countries. The per
capita income is calculated by dividing the total income of the country by the population
of the country. For the year 2017, the countries with a per capita income of US $12,056
per annum were declared rich countries, and the countries with a per capita income of
US $ 955 or less are called low-income countries.
The limitations of the criterion are
1. Other important factors, including literacy rate, infant mortality rate, and
healthcare, are ignored while classifying the countries.
2. Information about the unequal distribution of income is not mentioned by the
World Bank
3. The economy of the country cannot determine the development of the country.
5. In what respects is the criterion used by the UNDP for measuring development
different from the one used by the World Bank?
Answer: The criterion used by UNDP is different from the one used by the World Bank
because UNDP compares countries based on the educational level of the people, their
health status and per capita income. This is in contrast with the method used by the
World Bank because it only calculates the per capita income for measuring
development.
6. Why do we use averages? Are there any limitations to their use? Illustrate with your
own examples related to development.
Answer: Different countries have different populations, so calculating the average helps
in getting an estimated answer which can be used to compare different things at different
levels. There are limitations in calculating averages because we cannot know the
difference in the income of the people and the unfair distribution of income in a country
or state.
For example, if we calculate the per capita income of two countries, A and B, with 5
people each, the salary of five people in country A is Rs.23,000, Rs.22,000, Rs.23,500,
Rs.28,000 and Rs.25,000, and the income of people living in country B is Rs.1,50,000, Rs.
22,000, Rs.50,000, Rs.4,000, Rs.2,500. The average income of country A will be
Rs.24,300, and that of country B will be Rs.45,700. This proves that the average of country
B is higher than that of country A, and yet there is a disparity in the income distribution
between country B, and the income is evenly distributed in country A.
7. Kerala, with lower per capita income, has a better human development ranking
than Haryana. Hence, per capita income is not a useful criterion at all and should
not be used to compare states. Do you agree? Discuss.
Answer: Kerala, with lower per capita income, has a better human development ranking
than Haryana. Hence, per capita income is not a useful criterion at all and should not be
used to compare states. This is true because the literacy rate, infant mortality rate,
healthcare facilities, etc., are better in Kerala in comparison to Haryana. The per capita
income is only calculated by calculating the average income of the state, irrespective of
any other factor.
8. Find out the present sources of energy that are used by the people in India. What
could be the other possibilities fifty years from now?
Answer: The present sources of energy used by people in India include firewood, coal,
petroleum, crude oil and natural gas. The other possibilities fifty years from now can be
using solar energy and wind energy as sources of various energy forms. This is because
the current usage of energy sources may result in the loss of natural resources for future
generations.
9. Why is the issue of sustainability important for development?
Answer: Sustainable development refers to using natural resources in a manner that
they can be used by the present and future generations. The issue of sustainability is
important for development because if natural resources are not used carefully, they may
not be available for future generations. The depletion of resources of a country may
ultimately result in a lack of development of the country.
10. “The Earth has enough resources to meet the needs of all but not enough to
satisfy the greed of even one person.” How is this statement relevant to the
discussion of development? Discuss.
Answer: Development not just depends on the economic factors of a country but is also
dependent on resources that are available for the people of a country to use. The
statement, “The Earth has enough resources to meet the needs of all but not enough to
satisfy the greed of even one person”, is completely relevant in terms of the development
of a country because natural resources are non-renewable resources. It is the
responsibility of the people to use them to meet their needs and not to satisfy their greed.
If natural resources are not used wisely now, future generations may not be able to use
them for their needs, which will result in the downfall of the development of a country.
11. List a few examples of environmental degradation that you may have observed
around you.
Answer: A few examples of environmental degradation that we can observe around us
are
1. Pollution caused by vehicles and the excess use of fuels in vehicles
2. Industrial waste collected in residential areas and discarded into water bodies
3. Deforestation
4. Mining
 5. Soil erosion
The increased pollution in the environment has resulted in global warming, the melting
of glaciers, and worsening atmospheric conditions.
12. For each of the items given in Table 1.6, find out which country is at the top and
which is at the bottom.
Answer: As per table 1.6, Sri Lanka tops in all four categories. It has the highest Gross
National Income, Life Expectancy at birth, mean years of schooling of people aged 25 and
above and HDI rank in the world. Nepal has the lowest Gross National Income among the
given countries. Pakistan has the least Life Expectancy at birth and ranks the lowest HDI
rank in the world among the given countries. The mean years of schooling of people aged
25 and above are the lowest for Myanmar and Nepal.
13. The following table shows the proportion of adults (aged 15-49 years) whose BMI
is below normal (BMI <18.5 kg/m2) in India. It is based on a survey of various states
for the year 2015-16. Look at the table and answer the following questions.

State Male Female

Kerala 8.5 10
Karnataka 17 21
Madhya Pradesh 28 28

All States 20 23

a. Compare the nutritional level of people in Kerala and Madhya Pradesh.

Answer: The nutritional level of people in Kerala is higher than the nutritional level of
people in Madhya Pradesh.
a. Can you guess why around one-fifth of people in the country are
undernourished even though it is argued that there is enough food in the
country? Describe in your own words.
Answer: One-fifth of the population in the country is undernourished even though it is
argued that there is enough food in the country because of the following reasons:
1. The disparity in the distribution of food grains by the Public Distribution System
(PDS).
2. Nutritious food cannot be afforded by the poor population in the country.
3. Educational backwardness of people results in unemployment because of which
people cannot afford the basic necessity of food.
4. There is no proper distribution of ration at the fixed-price stores.