Use the information below to answer questions 1-6

Consider an economy that produces only two goods: fresh apricots and dried apricots. In this economy, the technology of producing dried apricots is to place fresh apricots on special racks and allow them to dry in the sun.Fannie's Farmsis the only company that grows fresh apricots, whileDarryl's Dried Victualsis the only producer of dried apricots. Fannie's sells some of its apricots directly to consumers for consumption. The relevant revenue and cost information for each of the two firms in the economy is given below:

Darryl's Dried Victuals

Revenue from selling dried apricots:$2,750,000

Cost of buying fresh apricots from Fannie's:1,800,000

Interest on funds borrowed to buy drying racks:200,000

Wages paid to employees550,000

Taxes90,000

Fannie's Farms

Revenue from selling fresh apricots:$2,350,000

Rent on land (including apricot trees)400,000

Wages to employees1,100,000

Taxes180,000

Darryl's profit from selling dried apricots is:

None of these are correct

$5,390,000

$670,000

$150,000

$110,000

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Question 2

3pts

Fannie's profit from selling fresh apricots is:

$110,000

$4,030,000

$300,000

None of these are correct

$670,000

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Question 3

3pts

Use theincome approachto calculate nominal GDP. Fill in the blanks in the table below.Enter numbers with no commas, no dollar signs and no decimals. For example, if your answer is $12,000 you would enter 12000 into the appropriate box.

a. Total wagesb. Interestc. Rentd.Total profit*e. Total taxesf. Nominal GDP

=(a+b+c+d+e)

*hint: get total profit by adding your answers for #1 and #2!

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Question 4

3pts

Now let's use theexpenditure approachto calculate nominal GDP. So here we will add up all consumer spending on FINAL goods in this economy. Remember that the final goods in this economy are fresh apricots and also dried apricots.We have to be careful not to double count here though because some of the fresh apricots produced by Fannie are used by Darryl to make dried apricots.So first we find out how much money consumers spent on each of the final goods:

How much money was spent by consumers on Fannie's fresh apricots?

$2,300,000

$800,000

$2,750,000

$550,000

None of these are correct

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Question 5

3pts

How much money was spent by consumers on Darryl's dried apricots?

$2,300,000

$2,750,000

$550,000

None of these are correct

$800,000

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Question 6

3pts

Now we are ready to calculate nominal GDP using the expenditure approach. Add up your answers for #4 and #5. What is nominal GDP calculated using the expenditure approach equal to?

$5,100,000

$3,300,000

$3,100,000

None of these are correct

$3,550,000