The functional distribution of income shows how national income is divided between ?
Correct answer: C. the factors of production
- A. employees
- B. the population
- C. the factors of production
- D. the working population
Explanation
Functional distribution classifies income according to the factor that earns it, such as wages to labour, rent to land, interest to capital and profit to entrepreneurship. Distribution among people or households is personal distribution instead.
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Individual consumers, firms and markets are examined through demand and supply, elasticity, consumer choice, production, costs, revenue and the determination of prices and output. The topic also covers market structures such as perfect competition, monopoly and oligopoly, plus market failure, externalities and the distinction between microeconomic decisions and economy-wide outcomes.
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