Question

The​ input-output matrix for a simplified economy with just three sectors​ (agriculture, manufacturing, and​ households) is given below.

          Agriculture Manufacturing Households

Agriculture Manufacturing Households

0.29 0.44 0.105 0.12 0.11 0.115 0.76 3.53 0.123

A.  How many units from each sector does the agriculture sector require to produce 1​ unit?

The agriculture sector requires _____units from​ agriculture, ____units from​ manufacturing, and ___units from households.

B.  What production levels are needed to meet a demand of 32 units of​ agriculture, 34 units of​ manufacturing, and 34 units of​ households?

Production levels of ____units of​ agriculture,___units of​ manufacturing, and _____units of households are needed.  ​(Round to the nearest whole number as​ needed.)

C.  How many units of manufacturing are used up in the​ economy's production​ process?

The​ economy's production process uses up_____ units of manufacturing.

​(Round to the nearest whole number as​ needed.)

Answer 1

(A)

see column 1 of matrix

The agriculture sector requires 0.29 units from​ agriculture, 0.12 units from​ manufacturing, and 0.76 units from households.

(B)

The agriculture sector (32 units) requires

32*0.29 units from agriculture = 9.28

32*0.12 units from manufacturing =3.84

32*0.76 units from household = 24.32

The manufacturing sector (34 units) requires

34*0.44 units from agriculture=14.96

34*0.11 units from manufacturing=3.74

34*3.53 units from household=120.02

The household sector (34 units) requires

34*0.105 units from agriculture=3.57

34*0.115 units from manufacturing=3.91

34*0.123 units from household=4.182

SO,

9.28+3.84+24.32=37.44 units of agriculture

3.84+3.74+3.91 = 11.49 units of manufacturing

24.32+120.02+4.182=148.522 units of household

Production levels of 38 units of​ agriculture,12 units of​manufacturing, and 149 units of households are needed.

(C)

The​ economy's production process uses up 34-12 = 22 units of manufacturing