Practicing Success

Target Exam

CUET

Subject

Economics

Chapter

Indian Economic Development: Poverty

Question:

The term "Jail cost of living" is related to which of the following options?

Options:

Human capital formation

Poverty line

Economic reforms

Unemployment

Correct Answer:

Poverty line

Explanation:

Dadabhai Naoroji used the menu for a prisoner and used appropriate prevailing prices to arrive at what may be called the ‘Jail cost of living’ to discuss the concept of the poverty line, in pre-independent India. However, only adults stay in jail whereas, in an actual society, there are children too. He, therefore, appropriately adjusted this cost of living to arrive at the poverty line. For this adjustment, he assumed that one-third population consisted of children and half of them consumed very little while the other half consumed half of the adult diet. This is how he arrived at the factor of three-fourths; (1/6)(Nil) + (1/6)(Half) + (2/3)(Full) = (3/4) (Full). The weighted average of consumption of the three segments gives the average poverty line, which comes out to be three-fourth of the adult jail cost of living.