Solved

Solve the Problem 70%70 \% Of Its Output To M\mathrm { M }

Question 12

Multiple Choice

Solve the problem.
-Suppose an economy consists of three sectors: Energy (E) , Manufacturing (M) , and Agriculture (A) Sector E sells 70%70 \% of its output to M\mathrm { M } and 30%30 \% to A\mathrm { A } .
Sector M sells 30%30 \% of its output to E, 50%50 \% to A, and retains the rest.
Sector A sells 15%15 \% of its output to E, 30%30 \% to MM , and retains the rest.
Denote the prices (dollar values) of the total annual outputs of the Energy, Manufacturing, and Agriculture sectors by pe,pm\mathrm { p } _ { \mathrm { e } } , \mathrm { p } _ { \mathrm { m } } , and pa\mathrm { p } _ { \mathrm { a } } , respectively. If possible, find equilibrium prices that make each sector's income match its expenditures.
Find the general solution as a vector, with pa\mathrm { p } _ { \mathrm { a } } free.


A)
[pepmpa]=[0.465pa0.593papa]\left[ \begin{array} { l } p _ { e } \\ p _ { m } \\ p _ { a } \end{array} \right] = \left[ \begin{array} { c } 0.465 \mathrm { pa } ^ { 0.593 } \mathrm { pa } \\ p _ { a } \end{array} \right]
B)
[pepmpa]=[0.356pa0.686papaa]\left[ \begin{array} { l } \mathrm { p } _ { \mathrm { e } } \\\mathrm { p } _ { \mathrm { m } } \\\mathrm { p } _ { \mathrm { a } }\end{array} \right] = \left[ \begin{array} { c } 0.356 \mathrm { pa } \\0.686 \mathrm { pa } \\\mathrm { pa } _ { \mathrm { a } }\end{array} \right]

C)
[pepmpa]=[0.607paa0.481papa]\left[ \begin{array} { l } p _ { e } \\p _ { m } \\p _ { a }\end{array} \right] = \left[ \begin{array} { c } 0.607 \mathrm { pa } _ { a } \\0.481 \mathrm { pa } ^ { p _ { a } }\end{array} \right]
D)

[pepmpa]=[0.308pa0.716papa]\left[ \begin{array} { l } \mathrm { p } _ { \mathrm { e } } \\\mathrm { p } _ { \mathrm { m } } \\\mathrm { p } _ { \mathrm { a } }\end{array} \right] = \left[ \begin{array} { c } 0.308 \mathrm { p } _ { \mathrm { a } } \\0.716 \mathrm { pa } \\\mathrm { p } _ { \mathrm { a } }\end{array} \right]

Correct Answer:

verifed

Verified

Unlock this answer now
Get Access to more Verified Answers free of charge

Related Questions