Home » Hula hoop fabricators cost $100 each. The Hi-Ho Hula Hoop Company is trying to decide how many of these machines to buy.

Hula hoop fabricators cost $100 each. The Hi-Ho Hula Hoop Company is trying to decide how many of these machines to buy.

3. Hula hoop fabricators cost $100 each. The Hi-Ho Hula Hoop Company is trying to decide how many of these machines to buy. HHHHC expects to produce the following number of hoops each year for each level of capital stock shown.Number of Fabricators Number of Hoops Produced per Year0 01 1002 1503 1804 1955 2056 210Hula hoops have a real value of $1 each. HHHHC has no other costs besides the cost of fabricators.a. Find the expected future marginal product of capital (in terms of dollars) for each level of capita. The MPK^f for the third fabricator, for example, is the real value of the extra output obtained when the third fabricator is added.b. If the real interest rate is 12% per year and the depreciation rate of capital is 20% per year, find the user cost of capital (in dollars per fabricator per year). How many fabricators should HHHHC buy?c. Repeat part (b) for a real interest rate of 8% per year.d. Repeat part (b) for a 40% tax on HHHHC’s sales revenues.e. A technical innovation doubles the number of hoops a fabricator can produce. How many fabricators should HHHHC buy when the real interest rate is 12% per year? 8% per year? Assume that there are no taxes and that the depreciation rate is still 20% per year.

Show more







Calculate Your Essay Price
(550 words)

Approximate price: $22

Calculate the price of your order

550 words
We'll send you the first draft for approval by September 11, 2018 at 10:52 AM
Total price:
$26
The price is based on these factors:
Academic level
Number of pages
Urgency
Basic features
  • Free title page and bibliography
  • Unlimited revisions
  • Plagiarism-free guarantee
  • Money-back guarantee
  • 24/7 support
On-demand options
  • Writer’s samples
  • Part-by-part delivery
  • Overnight delivery
  • Copies of used sources
  • Expert Proofreading
Paper format
  • 275 words per page
  • 12 pt Arial/Times New Roman
  • Double line spacing
  • Any citation style (APA, MLA, Chicago/Turabian, Harvard)

Our guarantees

Delivering a high-quality product at a reasonable price is not enough anymore.
That’s why we have developed 5 beneficial guarantees that will make your experience with our service enjoyable, easy, and safe.

Money-back guarantee

You have to be 100% sure of the quality of your product to give a money-back guarantee. This describes us perfectly. Make sure that this guarantee is totally transparent.

Read more

Zero-plagiarism guarantee

Each paper is composed from scratch, according to your instructions. It is then checked by our plagiarism-detection software. There is no gap where plagiarism could squeeze in.

Read more

Free-revision policy

Thanks to our free revisions, there is no way for you to be unsatisfied. We will work on your paper until you are completely happy with the result.

Read more

Privacy policy

Your email is safe, as we store it according to international data protection rules. Your bank details are secure, as we use only reliable payment systems.

Read more

Fair-cooperation guarantee

By sending us your money, you buy the service we provide. Check out our terms and conditions if you prefer business talks to be laid out in official language.

Read more

Order your essay today and save 10% with the coupon code: best10