24. In countries with well-developed economies, economic growth tends to:

Question

BlackTom AI · Accepted Answer

Marginal benefits from additional GDP are smaller in high‑income (well‑developed) economies because basic needs and many public goods are already met.

1) Relevant knowledge points and concepts
- Diminishing marginal utility: an extra dollar yields less additional welfare at higher income levels.
- Diminishing returns to capital in mature economies: further investment often produces smaller output gains.
- Distinction between GDP growth and improvements in well‑being: after a point extra GDP raises consumption less and may yield smaller gains in health, life satisfaction, or public services.
- Resource limits and technological offsets: innovation can improve productivity but cannot create truly limitless physical resources.

2) Step‑by‑step reasoning
- Well‑developed countries already have high per‑capita incomes and broad access to goods, services, and infrastructure.
- Adding the same absolute amount of income raises living standards much more for poor populations than for wealthy ones.
- Therefore incremental economic growth in rich countries tends to produce only modest incremental welfare gains.

3) Intermediate calculation/example
- Example: an extra $1,000 increases income from $1,000 to $2,000 (100% increase) versus from $40,000 to $41,000 (2.5% increase). The relative improvement in consumption opportunities and basic living standards is far larger in the first case, illustrating why benefits are minor at high income levels.

4) Why the correct answer is correct
- “Have minor benefits” captures the idea that additional growth in well‑developed economies yields smaller marginal improvements in welfare, health, and living standards compared with growth in poorer countries.

5) Why the other options are incorrect
- b. “diminish” is vague and misleading: growth itself does not necessarily diminish; rather, the incremental benefits of growth diminish. The option does not state this clearly.
- c. “create limitless resources” is false: economic growth does not create infinite physical resources—at best it increases efficiency or substitutes with technology.

Conclusion: The correct choice is a. have minor benefits, which matches the provided answer.

24. In countries with well-developed economies, economic growth tends to:Single choice

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