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Hula hoop fabricators cost $200 each. The HiHo Hula Hoop lCompany is trying to decide how many of these machines to buy. HHHHC expects to

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Hula hoop fabricators cost $200 each. The HiHo Hula Hoop lCompany 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 Number of Hoops Kf Fabricators Produced per Year MP 0 0 NA 1 so $D 55 53D 75 5D so $D 100 $D 105 $D Hula hoops have a real value of $6 each. HHHHC has no other costs besides the cost of fabricators. a. In the above table, nd the expected future marginal product of capital (in terms of dollars} for each level of capital. The mono-com MPHf for the third fabricator, for example, is the real value of the extra output obtained when the third fabricator is added. b. lfthe real interest rate is 11% per year and the depreciation rate of capital is 5% per year, nd the user cost of capital (in dollars per fabricator per year}. (It: = $|:| How many fabricators should HHHHC buy? I: machines

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