Hector's wealth is zero, he expects to work for another 45 years at a constant salary of $80,000 and live for another 60 years. assuming taxes are zero, if hector receives an unexpected $20,000 increase in salary his first year of work and he completely smooths consumption over his lifetime, his annual consumption
a. $67,500
b. $75,000.
c. $80,000.
d. $111,111.

The owner of firewood to go is considering buying a hydraulic wood splitter which sells for $50,000. he figures it will cost an additional $100 per cord to purchase and split wood with this machine, while he can sell each cord of split wood for $125. if, for this machine, design capacity is 50 cords per day, effective capacity is 40 cords per day, and actual output is expected to be 32 cords per day, what would be its efficiency?