NIM : 173221012
6. How much does this economic activity contribute to each of the following:
a. GDP: $1,000,000
b. NNP: GDP-Depreciation, thus $1,000,000 - $125,000 = $875,000
c. National Income: $875,000
d. Compensation of employees: $600,000 (workers)
e. Proprietors’ Income: $150,000 (Tina’s dividend)
f. Corporates Profit: $150,000 (Tina’s dividend) + $75,000 (TLM’s retained earning) +
$50,000 (corporate taxes) = $275,000
g. Personal Income: PI is the income that household and noncorporate businesses
receive, thus $600,000 (wages of workers) + $150,000 (Tina’s dividend) = $750,000
h. Disposable Personal Income: Personal Income-Personal Taxes, thus $750,000
(Personal Income) - $60,000 (Tina’s income taxes) - $140,000 (workers taxes) =
$550,000
7. Consider an economy that produces and consumes hot dogs and hamburgers:
8. Abby consumes only apples. In year 1, red apples cost $1 each, green apples cost $2
each, and Abby buys 10 red apples. In year 2, red apples cost $2 each, green apples cost
$1 each, and Abby buys 10 green apples.