What is meant by welfare in economics?

Welfare in economics refers to the overall well-being of individuals within a society. This concept encompasses various aspects of quality of life, including health, education, and personal happiness. Economic welfare is often tied to how resources are distributed and utilized in an economy, emphasizing that welfare is not solely about financial wealth but also the access to and quality of goods and services that enhance people's lives.

When discussing welfare, it is important to recognize that it can also involve measures of utility — how satisfied individuals are with their lives and their circumstances. This broader understanding of welfare captures how different factors contribute to the happiness and satisfaction of individuals, beyond just material wealth or income figures.

In contrast, the other options focus on more limited or specific definitions: financial status refers merely to monetary aspects of a country, the amount of goods produced pertains to economic output rather than individual well-being, and total income relates to the financial status of one person without considering their overall quality of life. Thus, the definition that aligns with welfare in economics centers on the holistic understanding of individuals' well-being.