Question 3 options: Assume that a very tiny and very poor DVC has income per cap

Question

Question 3 options:

Assume that a very tiny and very poor DVC has income per capita of $300 and total national income of $3.3 million.

a) How large is its population?

Instructions: Round your answer to the nearest dollar amount.

b) If its population grows by 3 percent during the year while its total income grows by 5 percent, what will be its new income per capita rounded to full dollars?

$_____?_______

c) If population had not grown during the year, but income did still grew by 5%, what would have been its income per capita?

$____?_______

Explanation / Answer

Ans:

a) Population =  total national income / income per capita

= $3.3 million / $300

= 11000

b) New income per capita = $3.465 million / 11330

= $306

Population after growth = 11000 * (1+0.03)

= 11330

total income after growth = $3.3 million (1+0.05)

= $3.465 million

c) income per capita when only income has grown and population remain same.

income per capita = $3.465 million / 11000

= $315

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