Why does real GDP per capita provide a better way to compare the economies of two different nation than does real GDP alone?

Answer 1

Usually when we look at GDP, we want to use it as an approximation for one of two things: productivity, or wellbeing. To do so we need to make like comparisons between economies of different sizes. Thus, if we have two nations with GDP's of $1 trillion, but one country has 10 million people, while the other has 100 million, then the first country is actually much more productive, since it is producing the same value with fewer resources, and likely enjoys a much higher standard of living (at least some people do-we don't know about equity from this scenario). The first country produces, and can consume $100,000 in value per person, quite a lot, while the second produces just $10,000 per person, and can consume only that amount.