Living Standards, Poverty and Population: Question 1

Worked solution

Step 1: Recall the two definitions of poverty

• Absolute poverty means being unable to afford the minimum necessities of life needed to survive, such as adequate food, clean water, shelter and clothing. Regardless of how much anyone else earns.
• Relative poverty means having an income that is significantly lower than the income of others in the same society (often measured against the average or median income), even if the household’s basic needs are still being met.

Step 2: Match the scenario to a definition

The household in Halvorne:

• can afford adequate food, clean water and basic clothing, so its basic physical needs are being met. This rules out absolute poverty, since absolute poverty specifically describes an inability to meet these needs.
• has an income that is only one-fifth of the average household income in Halvorne. A large gap compared with other households in the same country, which is exactly what relative poverty describes.

This household is therefore in $\boxed{\text{relative poverty}}$, option C.

Why the other options are wrong

• A (absolute poverty, low money income): the level of the household’s income in money terms is not what defines absolute poverty. What matters is whether basic necessities can be afforded, and here they can.
• B (absolute poverty, can’t afford food/water): contradicts the scenario directly, which states the household can afford adequate food, clean water and clothing.
• D (relative poverty, prices outrunning income): describes a possible cause of falling real income (inflation), not the definition of relative poverty, which compares a household’s income with others in the same society, not with a past level of prices.

Final answer

• The scenario describes relative poverty. option C, since basic needs are met but income is far below the country’s average.