If a household this week produces 20 of its product at a cost of 50 cents each, sells them for €1, works 40 hours at £10 per hour, must pay £10 in interest owed on its borrowing and rents out 10 units of capital at £100 for the week, the household's, nominal income is:

Question

Quizplus · Accepted Answer

The household's nominal income can be calculated as follows: Income from work = 40 hours * £10/hour = £400. Income from renting out capital = 10 units * £100/unit = £1,000. Income from selling products = 20 products * (€1 - 50 cents) = 20 * €0.5 = €10. Since €10 is not directly convertible to £ without knowing the exchange rate, and it's a relatively small amount compared to the other figures, it's likely an oversight in the question's design. However, without including this conversion, the total nominal income is £400 (work) + £1,000 (rent) = £1,400, before considering the interest owed. Subtracting the interest owed (£10) is not mentioned in the calculation, which might be an oversight in the question, but based on the provided options and calculations, the closest correct answer is £1,400, assuming the interest payment is not deducted from the nominal income calculation.

If a Household This Week Produces 20 of Its Product