Author Question: In constructing the Human Development Index, high income levels are given less than proportionate ... (Read 108 times)

PhilipSeeMore · **on:** Jun 30, 2018

In constructing the Human Development Index, high income levels are given less than proportionate weight because

a. Items bought by rich people are luxuries, not necessities.
b. United Nations bureaucrats are prejudiced against the rich.
c. Dollars received by rich people may have a lower marginal utility than dollars received by poor people.
d. Items bought by rich people create more pollution than those bought by the poor.
e. All of the above are valid reasons.

Question 2

What are some distinctions between light industry and heavy industry? Why do economies tend to start with light, and move to heavy industries?

What will be an ideal response?

laurnthompson · **Reply #1 on:** Jun 30, 2018

Answer to Question 1

C

Answer to Question 2

Usual distinctions include consumer vs. capital goods and labor- vs. capital-intensive goods. Economies tend to start with light industry because they require little capital and skills, in accordance with factor endowments. Also light industry tends to produce goods needed immediately and affordable by a large share of the population.