Reference no: EM131386245
Suppose Peuzo produced 500 of its popular new city car in the fourth quarter of 2014. Peuzo has two production costs: labor and intermediate goods. Peuzo pays its workers $35 per hour, and they employed 10,000 work hours. Intermediate goods were bought from Engin for $5000 per car. Engin's only input was labor, which cost $190, 000 total. In the fourth quarter, Peuzo sold 250 cars to consumers at a price of $9000.In the first quarter of 2015, Peuzo produced 600 cars. Peuzo's wage per hour went up by20%. Peuzo employed the same number of work hours. Also, Engin's labor costs were thesame as in the previous quarter. Peuzo sold to consumers all cars produced in the first quarter of 2015 and the cars left in inventory from the previous quarter. However, Peuzo raised the price of the car to $10000 after a successful marketing campaign that made thenew model very popular. What was Peuzo and Engin's total contribution to National Income in the fourth quarter of 2014? What was GDP in the first quarter of 2015?(Round to the nearest whole dollar)
A. NIQ4:2014 = $2, 225, 000; GDPQ1:2015 = $7, 000, 000
B. NIQ4:2014 = $3, 675, 000; GDPQ1:2015 = $7, 075, 000
C. NIQ4:2014 = $3, 750, 000; GDPQ1:2015 = $3, 750, 000
D. NIQ4:2014 = $2, 225, 000; GDPQ1:2015 = $3, 750, 000
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