An economy consists of coal, electric, and steel industries. For each $1.00 of output, the coal industry needs $0.03 worth of coal, $0.30 worth of electricity and $0.30 worth of steat the electric industry needs $0.03 worth of coal, $0.04 worth of electricity, and $0.04 worth of steel and the steel industry needs $0.20 worth of coal and $0.01 worth of steel. The sales demand is estimated to be $2 billion for coal, $2 billion for electricity, and $3 billion for steel. Suppose that the demand for electricity triples and the demand for coal doubles, whereas the demand for steel increases by only 50%. At what levels should the various industries produce in order to satisfy the new demand? Set up the input-output matrix Coal Electric Steel Coal Electric Steel
An economy consists of coal, electric, and steel industries. For each $1.00 of output, the coal industry needs $0.03 worth of coal, $0.30 worth of electricity and $0.30 worth of steat the electric industry needs $0.03 worth of coal, $0.04 worth of electricity, and $0.04 worth of steel and the steel industry needs $0.20 worth of coal and $0.01 worth of steel. The sales demand is estimated to be $2 billion for coal, $2 billion for electricity, and $3 billion for steel. Suppose that the demand for electricity triples and the demand for coal doubles, whereas the demand for steel increases by only 50%. At what levels should the various industries produce in order to satisfy the new demand? Set up the input-output matrix Coal Electric Steel Coal Electric Steel
Chapter1: Making Economics Decisions
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Problem 1QTC
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![An economy consists of coal, electric, and steel industries. For each $1.00 of output, the coal industry needs $0.03 worth of coal, 50,30 worth of electricity and $0.30 worth of steat the electric industry
needs $0.03 worth of coal, $0.04 worth of electricity, and $0.04 worth of steel; and the steel industry needs $0.20 worth of coal and $0.01 worth of steel. The sales demand is estimated to be $2 bilion
for coal, $2 billion for electricity, and $3 billion for steel. Suppose that the demand for electricity triples and the demand for coal doubles, whereas the demand for steel increases by only 50%. At what
levels should the various industries produce in order to satisfy the new demand?
Set up the input-output matrix.
Coal
Electric
Steel
Coal Electric Steel](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F05834585-9fda-43f2-ae6d-35eff4ecddb6%2F51beeba5-49a6-4c76-8917-6150f16b9e9e%2Fyv6k2td_processed.jpeg&w=3840&q=75)
Transcribed Image Text:An economy consists of coal, electric, and steel industries. For each $1.00 of output, the coal industry needs $0.03 worth of coal, 50,30 worth of electricity and $0.30 worth of steat the electric industry
needs $0.03 worth of coal, $0.04 worth of electricity, and $0.04 worth of steel; and the steel industry needs $0.20 worth of coal and $0.01 worth of steel. The sales demand is estimated to be $2 bilion
for coal, $2 billion for electricity, and $3 billion for steel. Suppose that the demand for electricity triples and the demand for coal doubles, whereas the demand for steel increases by only 50%. At what
levels should the various industries produce in order to satisfy the new demand?
Set up the input-output matrix.
Coal
Electric
Steel
Coal Electric Steel
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