Consider an economy with three sectors: Fuels and Power, Manufacturing, and Services. Fuels and Power sells 75% of its output to Manufacturing, 10% to Services, and retains the rest. Manufacturing sells 15% of its output to Fuels and Power, 70% to Services, and retains the rest. Services sells 25% to Fuels and Power, 45% to Manufacturing, and retains the rest. Find the equilibrium price for each sector. Assume the total economy is valued at $1,000,000,000 The equilibrium price of the Fuels and Power sector is The equilibrium price of the Manufacturing sector is The equilibrium price of the Services sector is

Consider an economy with three sectors: Fuels and Power, Manufacturing, and Services. Fuels and Power sells 75% of its output to Manufacturing, 10% to Services, and retains the rest. Manufacturing sells 15% of its output to Fuels and Power, 70% to Services, and retains the rest. Services sells 25% to Fuels and Power, 45% to Manufacturing, and retains the rest. Find the equilibrium price for each sector. Assume the total economy is valued at $1,000,000,000 The equilibrium price of the Fuels and Power sector is The equilibrium price of the Manufacturing sector is The equilibrium price of the Services sector is

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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The reallocation of goods from low to high valued use can take the form of a change in legal ownership or a physical reallocation of the good from an area where it has low value to an area where it has a higher value. In this case, used cars are worth [more, less] in Mexico than they are in the United States. We know this because the price of used cars is [higher,lower ] in Mexico compared to the US. If people are left alone to pursue their self-interest as they define it, owners of used cars will enrich themselves if they physically relocate there cars to Mexico and sell them. They might do this directly or middlemen may do it for them. In either case, used cars ["will be sent from u.s to Mexico", "will be sent from Mexico to U.S"] . The graph shows the used car markets in the US and Mexico when the government interferes in the free market and prevents/regulates the sale of…
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