Suppose an economy consists of the Coal, Electric, and Steel sectors. Denote the prices (that is, dollar values) of the total annual outputs of the Coal, Electric, and Steel sectors by pc PE, and ps, respectively. Suppose the general solution to find equilibrium prices that make each sector's income match its expenditures is pc = 0.89ps, PE = 0.88ps, and ps is free. One set of equilibrium prices for this economy is Pc = $89, pɛ = $88, and ps = $100. Find another set. Suppose the same economy used Japanese yen instead of dollars to measure the values of the various sector's output. Would this change the problem in any way? Discuss. If ps = $200, then pc = $ and pe = $ (Type integers or decimals.)
Unitary Method
The word “unitary” comes from the word “unit”, which means a single and complete entity. In this method, we find the value of a unit product from the given number of products, and then we solve for the other number of products.
Speed, Time, and Distance
Imagine you and 3 of your friends are planning to go to the playground at 6 in the evening. Your house is one mile away from the playground and one of your friends named Jim must start at 5 pm to reach the playground by walk. The other two friends are 3 miles away.
Profit and Loss
The amount earned or lost on the sale of one or more items is referred to as the profit or loss on that item.
Units and Measurements
Measurements and comparisons are the foundation of science and engineering. We, therefore, need rules that tell us how things are measured and compared. For these measurements and comparisons, we perform certain experiments, and we will need the experiments to set up the devices.
![### Equilibrium Prices in a Multi-Sector Economy
#### Problem Statement
Suppose an economy consists of the Coal, Electric, and Steel sectors. Denote the prices (that is, dollar values) of the total annual outputs of the Coal, Electric, and Steel sectors by \( p_C \), \( p_E \), and \( p_S \), respectively. Suppose the general solution to find equilibrium prices that make each sector's income match its expenditures is:
\[ p_C = 0.89p_S, \]
\[ p_E = 0.88p_S, \]
and \( p_S \) is free.
One set of equilibrium prices for this economy is:
\[ p_C = \$89, \]
\[ p_E = \$88, \]
\[ p_S = \$100. \]
Find another set of equilibrium prices. Suppose the same economy used Japanese yen instead of dollars to measure the values of the various sector's output. Would this change the problem in any way? Discuss.
#### Questions
1. If \( p_S = \$200 \), then \( p_C = \$ \) [type your answer here] and \( p_E = \$ \) [type your answer here]. (Type integers or decimals.)
#### Directions
- Solve for the equilibrium prices \( p_C \) and \( p_E \) given \( p_S = \$200 \).
- Discuss whether changing the currency to Japanese yen affects the economic analysis.
### Solution Steps:
1. **Finding New Equilibrium Prices:**
Given \( p_S = \$200 \):
Substitute \( p_S \) into the equilibrium equations:
\[
p_C = 0.89 \times 200 = 178
\]
\[
p_E = 0.88 \times 200 = 176
\]
So, \( p_C = \$178 \) and \( p_E = \$176 \).
2. **Discussion on Currency Change:**
Changing the currency from dollars to Japanese yen does not change the relative values or the equilibrium conditions. The equilibrium prices will be scaled by the exchange rate, but the equations and their solutions remain the same in terms of relative proportions.
### Summary
By substituting \( p_S = 200 \) into the given equations, we find that \( p_C = 178 \) and \( p_E = 176 \). Changing the measurement unit of the prices to Japanese yen](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fa204cf79-6df4-4f25-af61-d4fca6ca5b9e%2F9e105ea7-0316-4b49-a5f1-07f5cad91e7a%2F7gvsd4b_processed.jpeg&w=3840&q=75)

Trending now
This is a popular solution!
Step by step
Solved in 5 steps with 25 images









