CORRECT ANSWERS ARE DIRECTLY BELOW THE WORDS CORRECT ANSWER. FOR FILL-IN-THE-BLANK questions: If your answer is in decimal form, round to 2 decimal places. For example, if your answer is .412, enter it into the fill-in-the-blank as .41, or if your answer is 1.415, enter it into the fill-in-the-blank as 1.42. If there are no decimals in your answer, you will simply enter the number; so if your answer is 2, enter 2 with no decimals. Do not enter any extra spaces, do not enter commas or $ or % symbols. Question 1 3 / 3 pts 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 Farms is the only company that grows fresh apricots, while Darryl’s Dried Victuals is 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 employees 550,000 Taxes 90,000 Fannie’s Farms Revenue from selling fresh apricots: $2,350,000 Rent on land (including apricot trees) 400,000 Wages to employees 1,100,000
Taxes 180,000 Darryl's profit from selling dried apricots is: $5,390,000 $670,000 None of these are correct Correct! $110,000 $150,000 Question 2 3 / 3 pts Fannie’s profit from selling fresh apricots is: $300,000 $110,000 Correct! $670,000 None of these are correct $4,030,000 Question 3 1.5 / 3 pts Use the income approach to 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 wages 1,650,000 b. Interest 200,000 c. Rent 400,000 d.Total profit* 780,000 e. Total taxes 270,000 f. Nominal GDP =(a+b+c+d+e) 3,300,000 *hint: get total profit by adding your answers for #1 and #2! Answer 1: You Answered1,650,000 Correct Answer 1650000 Answer 2: You Answered200,000 Correct Answer 200000 Answer 3: You Answered400,000 Correct Answer 400000 Answer 4:
You Answered780,000 Correct Answer 780000 Answer 5: You Answered270,000 Correct Answer 270000 Answer 6: You Answered3,300,000 Correct Answer 3300000 Question 4 3 / 3 pts Now let’s use the expenditure approach to 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? None of these are correct Correct!
- Fall '10