Input-output analysis. An economy is based on two industrial sectors, agriculture and fabrication. Production of a dollar’s worth of agriculture requires an input of $ 0.30 from the agriculture sector and $ 0.20 from the fabrication sector. Production of a dollar’s worth of fabrication requires $ 0.10 from the agriculture sector and $ 0.40 from the fabrication sector. (A) Find the output for each sector that is needed to satisfy a final demand of $ 50 billion for agriculture and $ 20 billion for fabrication. (B) Find the output for each sector that is needed to satisfy a final demand of $ 80 billion for agriculture and $ 60 billion for fabrication.
Input-output analysis. An economy is based on two industrial sectors, agriculture and fabrication. Production of a dollar’s worth of agriculture requires an input of $ 0.30 from the agriculture sector and $ 0.20 from the fabrication sector. Production of a dollar’s worth of fabrication requires $ 0.10 from the agriculture sector and $ 0.40 from the fabrication sector. (A) Find the output for each sector that is needed to satisfy a final demand of $ 50 billion for agriculture and $ 20 billion for fabrication. (B) Find the output for each sector that is needed to satisfy a final demand of $ 80 billion for agriculture and $ 60 billion for fabrication.
Solution Summary: The author calculates the output matrix X of the agriculture and fabrication sectors where the technology matrix and demand matrix are (l)
Input-output analysis. An economy is based on two industrial sectors, agriculture and fabrication. Production of a dollar’s worth of agriculture requires an input of
$
0.30
from the agriculture sector and
$
0.20
from the fabrication sector. Production of a dollar’s worth of fabrication requires
$
0.10
from the agriculture sector and
$
0.40
from the fabrication sector.
(A) Find the output for each sector that is needed to satisfy a final demand of
$
50
billion for agriculture and
$
20
billion for fabrication.
(B) Find the output for each sector that is needed to satisfy a final demand of
$
80
billion for agriculture and
$
60
billion for fabrication.
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