In economics, per capita income of a country is derived from which combination of national income and population figures?

Introduction / Context:
Per capita income is one of the most widely used indicators to compare the standard of living across countries and over time. It tells us on average how much income is available per person in an economy. For exam purposes, it is important to understand exactly which basic statistics are used to calculate per capita income and how they are combined. This question checks whether you can correctly identify the components that are required to derive per capita income for a country.

Given Data / Assumptions:

• We are dealing with the concept of per capita income, also called income per head.
• The options mention national income, population, both together, and an option saying none of these.
• We assume standard textbook definitions of national income and population.
• No additional adjustments such as price level changes or purchasing power parity are considered here.

Concept / Approach:
Per capita income is calculated by dividing the total income of the country by the total population. The total income is usually measured as national income at current or constant prices, depending on the purpose. Population means the number of people living in the country during the period under consideration. Without knowing both the aggregate national income and the size of the population, we cannot compute income per person. Therefore, per capita income is derived from the combination of national income and population figures, not from either of them alone.

Step-by-Step Solution:
Step 1: Recall the simple formula for per capita income: Per capita income = National income / Population.Step 2: Note that national income alone tells us only the total size of income, not how it is spread over people.Step 3: Population alone tells us how many people live in the country, but does not tell us how much total income is available.Step 4: To find income per person, we must use both national income and population together and compute their ratio.Step 5: Therefore, per capita income is derived from national income and population both, so that option is correct.

Verification / Alternative check:
To verify, imagine two countries with the same national income but different population sizes. The one with the smaller population will have higher per capita income. This shows that national income alone is not enough; population must also be considered. Similarly, two countries with the same population but different national incomes will have different per capita incomes. This again shows that both statistics must be combined in a ratio. Textbooks consistently present per capita income as national income divided by population, confirming that the correct option is the one that includes both national income and population.

Why Other Options Are Wrong:
National Income: This gives only the total income of the country and does not account for how many people share that income. It cannot by itself give the figure per person.
Population: This tells us only the number of people, not the amount of income produced. Without national income, we cannot compute income per head.
None of these: This is incorrect because there is a clear formula using both national income and population, so the correct answer is included among the options.

Common Pitfalls:
Some learners confuse per capita income with national income and assume that a larger national income always means a better standard of living. They forget that a very large population can reduce income per person. Others think that population growth alone determines living standards. The key is to remember that per capita income is a ratio involving both total income and total population. This helps avoid confusion and supports correct interpretation of economic indicators.

Final Answer:
Per capita income of a country is derived from national income and population both.