Ron, age 19, is a full-time graduate student at City University. During 2010, he received the following payments:

State scholarship for ten months (tuition and books) …… $4,000

Loan from college financial aid office ………………..........….. $2,000

Cash support from parents ……………………...............………… $2,500

Cash award for being the outstanding resident adviser … $1,000

Total ……………………………..............................……………………….. $9,500

Ron served as a resident advisor in a dormitory and, therefore, the university waived the $2,500 charge for the room he occupied. What is Ron's adjusted gross income for 2010?

a) $1,000

b) $3,500

c) $5,000

d) $12,000

e) None of the above