Final answer:
GDP per capita is a crucial metric when comparing economic well-being among countries, as it takes into account the size of a country's population, unlike total GDP. It indicates the average economic output per person but might not fully capture the actual standard of living which also includes factors like income distribution and access to services. Therefore, GDP per capita differences between countries like India and the United States may not fully reflect the comparative economic well-being of their citizens.
Step-by-step explanation:
The student's question relates to whether we would expect a significant difference in GDP per capita between India and the United States as compared to the actual comparative economic well-being of their populations.
While GDP per capita provides a measure of a country's economic output per person, it doesn't fully account for all factors affecting economic well-being, such as income distribution, health, and education quality, or access to services. The intensity mentioned refers to the efficiency with which a country's economy uses resources to produce GDP.
The modest effect of intensity means that even as countries develop, the improvement in GDP per capita compared to actual economic well-being is not always proportionate.
Comparing GDP and GDP per capita rankings reveals that a country's large population does not necessarily mean a higher standard of living per individual. Countries with large GDPs but high populations, like India, may have lower GDP per capita than countries with smaller populations but higher standards of living, like Germany.
This comparison is crucial because it highlights that GDP per capita is a more accurate indicator when comparing living standards between countries. Moreover, when considering purchasing power parity (PPP), the comparison might yield even different insights into real living standards.