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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. Based on this information, compute Barry’s contribution to the following measures of income. a. gross domestic product b net national product c national income d personal income e. disposable personal income

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Principles of Economics (MindTap C...

8th Edition
N. Gregory Mankiw
Publisher: Cengage Learning
ISBN: 9781305585126

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Chapter
Section
BuyFindarrow_forward

Principles of Economics (MindTap C...

8th Edition
N. Gregory Mankiw
Publisher: Cengage Learning
ISBN: 9781305585126
Chapter 23, Problem 12PA
Textbook Problem
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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. Based on this information, compute Barry’s contribution to the following measures of income.

a. gross domestic product

b net national product

c national income

d personal income

e. disposable personal income

Sub part (a):

To determine
GDP

Explanation of Solution

The GDP is the summation of the money value of all the goods and services produced within the political boundary of a country within a financial year. The expenditure is a main part of the GDP consideration because all the expenditures turn out to be someone's income which can be calculated in the GDP...

Sub part (b):

To determine
NNP.

Sub part (c):

To determine
National Income.

Sub part(d):

To determine
Personal Income.

Sub part (e):

To determine
Personal Disposable Income.

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