Question

a hypothetical economy three commodities A, B and C are produced. The three commodities serve as intermediate inputs in each other’s production. To produce a unit of A, 0.3 unit of A, 0.2 unit of B and 0.3 unit of C needed. Similarly to produce a unit of B, 0.1 unit of B, 0.3 unit of A and 0.3 unit of C needed. In case of C, to produce its one unit 0.1 unit of C, 0.1 unit of A and 0.4 unit of B needed. 0.10, 0.15, 0.20 units of labour and 0.5, 0.3, 0.2 of land are required to produce a unit of A, B and C respectively. The wage rate and rent rate is Rs 70 per Labour Day and Rs 150 per unit respectively. Existing gross output for A, B and C products are 830, 850 and 890 respectively. The economy needs 250, 330, and 350 units of A, B and C respectively for final consumption. You are required to construct the input-output transaction table for the existing gross output and new

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gross output. Determine the units of each primary input required for each product production. Find the value added for each product corresponding to each primary input. Determine the equilibrium prices. Use matrix to solve these questions.​

Answer 1

Answer:

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