Q.Distinguish between functional distribution and personal distribution of income.

The two terms answer two different questions about the SAME national income — one asks WHICH FACTOR earned it, the other asks WHICH PERSON received it.

(worked out below)

Functional distribution looks at national income through the lens of the FOUR FACTORS OF PRODUCTION: it asks how much of the total product is earned by land (as rent), by labour (as wages), by capital (as interest), and by entrepreneurship (as profit). This is the classical concern of distribution theory, and it is what determines the PRICE of each factor.

Personal distribution, by contrast, looks at the very same total income through the lens of INDIVIDUALS or households: it asks what SHARE of national income is received by, say, the richest 10% of the population compared to the poorest 10%, irrespective of whether that income came to them as wages, rent, interest, or profit (a single wealthy household, for instance, might receive income from all four sources at once). Personal distribution is the relevant concept when studying income INEQUALITY, and is a genuinely separate question from what functional distribution studies.