The per capita income is calculated as

Analyze the question: It asks how per capita income is calculated. The options are written as "GNP - ...", but the dash is almost certainly a formatting stand-in for "divided by" (GNP ÷ something), not subtraction.

Concept: "Per capita" means "per head" or "per person". Per capita income shows the average income each person in a country earns.

Formula:

Per capita income = National income (or GNP) ÷ Total population

Working through the options:

• A. GNP ÷ working age population: This would give income per worker, not per person. ✘
• B. GNP ÷ real national income: This is a ratio of two income measures and tells you nothing per person. ✘
• C. GNP ÷ total capital expenditure: This has nothing to do with people. ✘
• D. GNP ÷ dependency ratio: The dependency ratio compares dependants to workers, so this isn't an average income per head. ✘
• E. GNP ÷ population: This is the correct formula. ✔

Example: If Nigeria's GNP were ₦200 trillion and its population 200 million, then per capita income = 200,000,000,000,000 ÷ 200,000,000 = ₦1,000,000 per person.

**Answer: E.

Exam tip: "Capita" means "head", so per capita always means divide by the total population. The same idea applies to per capita consumption, per capita expenditure, and so on.