Question

An economy produces only two commodities X and Y. The two commodities serve as
intermediate input in each other’s production. To produce a unit of X, 0.2 unit of X
and 0.6 unit of Y are needed. Similarly, to produce a unit of Y, 0.4 unit of X and 0.3
unit of Y are needed. 30 and 50 labour hours are required to produce a unit of X and a
unit of Y respectively. The wage rate is Rs. 20 per labour hour. If the final demand of
X increases by 1500 units and that of Y decreases by 1200 units, find:

Answer 1

Answer:

An economy produces only two commodities X and Y. The two commodities serve as

intermediate input in each other’s production. To produce a unit of X, 0.2 unit of X

and 0.6 unit of Y are needed. Similarly, to produce a unit of Y, 0.4 unit of X and 0.3

unit of Y are needed. 30 and 50 labour hours are required to produce a unit of X and a

unit of Y respectively. The wage rate is Rs. 20 per labour hour. If the final demand of

X increases by 1500 units and that of Y decreases by 1200 units, find:

Explanation:

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