Question

Question No 1: 5 Marks

In a single day, Ali the barber collects Rs 500 from haircuts; over this day, his equipment depreciates in value by Rs 50. Of the remaining Rs 450, Ali pays sales tax worth Rs 30, takes home Rs 200 and retains Rs 220 for improvement and buying of new equipment. He further pays Rs 20 as income tax from his income.
Based on this information, complete Ali’s contribution to the following measures of national income. Calculations and formulas must be on work sheet.
1. Gross Domestic Product
2. NNP at market price
3. NNP at factor cost
4. Personal income
5. Personal disposable income.

Answer 1

Answer:

(a) Gross Domestic Product: Rs 500

(b) NNP at market price : Rs 500 - depreciation = Rs 500 - Rs 50 = Rs 450

(c) NNP at factor cost: NNP (at market price) - Net indirect tax = Rs 450 - Rs 30 = Rs 420.

hope it may help you.