Question

-14 points Two sectors of the U.S. economy are (1) audio, video, and communication equipment and (2) electronic components and accessories Suppose in 1998, the input-output table involving these two sectors was as follows (all figures are in millions of dollars) Determine the production levels necessary in these two sectors to meet an external demand for $78,000 million of communication equipment and $92,000 million of electronic components. Round answers to two significant digits million From Equipment Components To Equipment Components 500 32,000 6,200 25,000 Total Output 90,000 240,000

Answer 1

"Technology matrix is given by A = [a_11 a_21 a_12 a_22] a_11 = 6,200/90,000 = 0.068888 = 0.069 a_12 = The unit of equipment to produce one unit of components a_12 = 500/140,000 = 1/280 almostequalto 0.004 a_21 = The units of components to produce the one unit of equipment. = 25000/90000 = 0.277777 = 0.28 a_ = The units of components to produce of units of components a_22 = 32,000/140,000 = 0.23 Therefore the technology matrix A = [0.069 0.28 0.004 0.23] The demand for communication equipment and electronic component is D = [$ 78,000 $92,000] production Formula doublerightarrow X = (I - A)^-1 D [[1 0 0 1] - [0.069 0.28 0.004 0.23]]^-1 [78,000 92,000] [0.931 -0.28 -0.004 + 0.77]^-1 [78,000 92,000] 1/0.71575 [0.77 0.28 0.004 0.731] [78,000 92,000] 1/