Consider an economy that produces only three types of fruits: apples, oranges and bananas. In the base year the production and price were as follows: FruitsQuantity (kg)Price ($)Apples30002Oranges60003Bananas80004 In the current year the production and price were as follows: FruitsQuantity (kg)Price ($)Apples40003Oranges140002Bananas320005 Find Nominal GDP in base and current years. What is the percentage change during this period?Find Real GDP in base and current years. What is the percentage change during this period?Find the GDP deflator for base and current years. What is the inflation during this period 2;.An economy has the production function Y = 0.2(K + N)In the current period K = 100 and N = 100Graph the relationship between output and capital, holding labour constant at its current value. What is the MPK? Does the MPK diminish?Graph the relationship between output and labour, holding capital constant at its current value. Find the MPN for an increase of labour from 100 to 110. Compare this result with the MPN for an increase in labour from 110 to 120. Does the MPN diminish.3.Hula hoop fabricators cost 100 $ each. The Hi-Ho Hula HOOP Company (HHHHC) 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 FabricatorsNumber of hoops produced per year00110021503180419552056210 Hula hoops have a real value of 1 $ each. HHHHC has no other costs of Fabricators. Find the expected future marginal product of capital (MPKf) in terms of Dollars for each level of capital.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. How many fabricators should HHHHC buy?Repeat part (b) for real interest rate of 8 % per year.Repeat part (b) for a 40 % tax on HHHHC sales revenue.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 the depreciation rate is still 20 % per year.

As there are multiple questions, answering first question. Kindly repost the other questions again.

Answered: Find Nominal GDP in base and current…

Macroeconomics: Private and Public Choice (MindTap Course List)

16th Edition

ISBN:9781305506756

Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson

Publisher:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson

Chapter7: Taking The Nation's Economic Pulse

Section: Chapter Questions

Problem 14CQ

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Consider an economy that produces only three types of fruits: apples, oranges and bananas. In the base year the production and price were as follows:

Fruits	Quantity (kg)	Price ($)
Apples	3000	2
Oranges	6000	3
Bananas	8000	4

In the current year the production and price were as follows:

Fruits	Quantity (kg)	Price ($)
Apples	4000	3
Oranges	14000	2
Bananas	32000	5

Find Nominal GDP in base and current years. What is the percentage change during this period?
Find Real GDP in base and current years. What is the percentage change during this period?
Find the GDP deflator for base and current years. What is the inflation during this period
2;.An economy has the production function Y = 0.2(K + N)

In the current period K = 100 and N = 100

Graph the relationship between output and capital, holding labour constant at its current value. What is the MPK? Does the MPK diminish?
Graph the relationship between output and labour, holding capital constant at its current value. Find the MPN for an increase of labour from 100 to 110. Compare this result with the MPN for an increase in labour from 110 to 120. Does the MPN diminish.
3.Hula hoop fabricators cost 100 $ each. The Hi-Ho Hula HOOP Company (HHHHC) 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 year
0	0
1	100
2	150
3	180
4	195
5	205
6	210

Hula hoops have a real value of 1 $ each. HHHHC has no other costs of Fabricators.

Find the expected future marginal product of capital (MPKf) in terms of Dollars for each level of capital.
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. How many fabricators should HHHHC buy?
Repeat part (b) for real interest rate of 8 % per year.
Repeat part (b) for a 40 % tax on HHHHC sales revenue.
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 the depreciation rate is still 20 % per year.

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