National income and standards of living, Managerial Economics

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NATIONAL INCOME AND STANDARDS OF LIVING

Standard of living refers to the quantity of goods and services enjoyed by a person. These goods may be provided publicly, such as in the case of health care or education or they may be acquired by direct purchase. It also includes the less easily quantifiable aspects of living such as terms and conditions of employment and general living environment.

National Income figures can be used to measure the standard of living at a particular point of time and over time. This is done by working out the per capita income of the country. By per capita income we mean: the value of goods and services received by the average man. Per capita income is obtained by dividing the National Income by the Total population. If the per capita income is high, it can be deduced that the standard of living is high.


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