Chapter 1.11, Problem 7E

Consider an open economy with consumption matrix

$C=\left[\begin{array}{l}\frac{1}{2}0\\ 01\end{array}\right]$

1. a. Show that the economy can meet a demand of d₁ = 2 units from the first sector and d₂ = 0 units from the second sector, but it cannot meet a demand of d₁ = 2 units from the first sector and d₂ = 1 unit from the second sector.
2. b. Give both a mathematical and an economic explanation of the result in part (a).