Question

Why is per capita income is useful to compare development two country ? What are its limitations? Give example

Answer 1

here is your answer mate......

Per capita income is the income of an average person living in a country which can be measured by dividing the total income from the total population of the country.

the limitation is that it does not give exact reference how much an individual is likely to earn.

like if a community earns above 50000 and a community only 10000

in a same area. then the per capita income will be high but the money destribution will be unequal.

hope it helps you....

Answer 2

Per capita income means income per head Or average income of a person is known as per capita income.

It can be used to compare the development of two countries as it tells the average income of a person of a country. Higher the per capita income more is the country developed.

Limitations

• Per capita income shows the average income of a country but it does not tell about how this income is distributed.

• It also does not tell about the availability of basic things (education, proper health treatment etc) of a country.

Hope it helps.