In an economy, households receive a total income of $5 million. Of this, $3.5 million are wages received for labor services, $1 million are rental payments, and $250,000 are interest payments received. In this economy, what are the costs of production and profits equal to respectively?

A. $7.25 million; $250,000
B. $5 million; $500,000
C. $7.75 million; $0
D. $5 million; $250,000


Answer: D

Economics

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