The gross domestic product of Neonland is 450,000 neons. It has a total population of 1,500. 30% of the total population in Neonland comprises of retired workers, 50% of the population is employed, and the remaining are unemployed children
i) Calculate the income per capita of Neonland.
ii) What is the income per worker of Neonland?
iii) Is there a difference between the two measures? If yes, explain the reason behind this difference.
i) The formula for calculating the income per capita of a country is:
Income per capita = Gross Domestic Product/Total Population.
In this case, gross domestic product is 450,000 neons while total population is 1,500. Therefore, the income per capita of Neonland is $450,000/1,500 = 300 neons.
ii) The formula for calculating the income per working age population is:
Income per worker = Gross Domestic Product/Number of people in employment
In this case, 50% of the population is in employment. Therefore, income per worker is .
iii) There is a difference of 600 neons - 300 neons = 300 neons between the two measures. Income per capita is higher because the number of people in employment is lower than the total population.
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