Reference no: EM131386243
Consider a simple economy with two companies: Fresh Juice, and Organic Oranges. OrganicOranges do not sell oranges directly to consumer; rather it supplies its entire harvest toFresh Juice as an intermediate good. Fresh Juice sells its juice directly to consumers. Asjuice is perishable, juice produced in Q1 cannot be sold in Q2. Suppose Fresh Juice produced 2,450 gallons of juice in Q1. The two inputs used wereoranges, which cost $10, 000 total, and labor, which cost $15 per gallon of juice. OrganicOranges's only input is labor, which costs $6, 000, total. Fresh Juice sold 1,400 gallons ofjuice in the first quarter at a price of $50 each. Which of the following correctly matchestotal corporate profit and wages in the economy in Q1?
A. Profit Total = 27,250; W agesT otal = 42,750
B. P roit total = 23,750; W agesT otal = 42,750
C. P rof itT otal = 27,250; W agesT otal = 40,250
D. P rof itT otal = 27,750; W agesT otal = 40,250
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