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Country A: 5 citizens each earn around ₹10,000 monthly. Country B: 4 citizens earn ₹500, 1 earns ₹48,000. Both have the same average. The chapter prefers Country A because:
ACountry A has fewer citizens than Country B in total
BCountry B is technically much richer in aggregate income
CCountry A has more equitable income distribution
DAverage income is a flawed measure with no practical use
Answer & Solution
Correct answer: C. Country A has more equitable income distribution
The chapter prefers Country A because its income is more EQUITABLY distributed: nobody is extremely rich or extremely poor. Average income hides distribution, so two countries with the same average can be very different.
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