Question

One day, Barry the Barber, Inc., collects $400 for haircuts. Over this day, his equipment depreciates in value by $50. Of the remaining $350, Barry sends $30 to the government in sales taxes, takes home $220 in wages, and retains $100 in his business to add new equipment in the future. From the $220 that Barry takes home, he pays $70 in income taxes.

a. gross domestic product
b. net national product
c. national income
d. personal income
e. disposable personal income

Answer 1

Answer: See explanation

Step-by-step explanation:

a. gross domestic product

The GDP is $400 which is the money that Barry collects for haircut.

b. net national product

Net National Product:

= GDP – Depriciation

= $400 - $50

= $350

c. national income

The national income is the total income that the residents of the country earns and this will be same as Net National Product which is $350

d. personal income

Personal income:

= National income – Retained earnings

= $350 - $100 - $30

= $220

e. disposable personal income

Disposable personal income:

= Personal income – Personal tax

= $220 - $70

= $150