Question

Use an example to explain why economists measure a country’s economic development by its GDP per capita rather than its total GDP.

Answer 1

Total GDP tells us the value of the goods and services a nation produces, but the total number does not tell us how productive the country is compared to its population. For instance, in the lesson we saw that Mexico’s GDP was $875 billion in 2010. Mexico’s total GDP was more than twice the size of Norway’s $381 billion GDP. If total GDP was all we looked at, we might get the idea that Mexico is much more productive than Norway. However, Norway had a population of about 4.9 million in 2010, while Mexico’s population was close to 113 million. Mexico’s population was 23 times as big! When we divide Norway’s GDP by its population, we get its GDP per capita of $79,089. We can say that Norway’s economy was productive and developed enough to produce $79,089 per person. Mexico’s GDP per capita was $8,143. Using GDP per capita, we can see that Norway’s economy was actually more productive and developed than Mexico’s economy in 2010

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Answer 2

Responses may vary but should include some or all of the following information: Primary-sector jobs are focused on obtaining natural resources or raw materials. Farming, fishing, mining, and logging are primary-sector jobs. Primary-sector jobs turn raw materials or resources into usable finished products. Processing, manufacturing, and construction are secondary-sector jobs. The primary and secondary sectors provide the basics that people need. When there is little technology, it takes a lot of workers to provide these basics. However, as technology improves (e.g. bigger and faster farm equipment and robots in factories), machines do more of the work. It takes fewer and fewer people to produce what is needed from the primary and secondary sectors. The extra workers are now available to take jobs in the tertiary sector, providing more and different services for others.

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hope this helps!