Math Problem Statement

An economy is based on three sectors—agriculture, manufacturing, and services. For each unit of output, agriculture requires inputs of 0.30 unit from agriculture, 0.30 unit from manufacturing, and 0.30 unit from services. For each unit of output, manufacturing requires inputs of 0.30 unit from agriculture, 0.30 unit from manufacturing, and 0.30 unit from services. For each unit of output, services requires 0.30 unit from agriculture, 0.40 unit from manufacturing, and 0.30 unit from services. Determine the production levels needed to satisfy a final demand of 0 units for agriculture, 50 units for manufacturing, and 0 units for services.

Solution

The problem seems to be about an economic model based on three sectors: agriculture, manufacturing, and services. Each sector requires inputs from the other two sectors, and the final demand for these sectors must be met by determining the required production levels.

Given:

  • For each unit of agriculture, 0.30 units are required from agriculture, 0.30 units from manufacturing, and 0.30 units from services.
  • For each unit of manufacturing, 0.30 units are required from agriculture, 0.30 units from manufacturing, and 0.30 units from services.
  • For each unit of services, 0.30 units are required from agriculture, 0.40 units from manufacturing, and 0.30 units from services.

The goal is to determine the production levels needed to satisfy a final demand of:

  • 0 units for agriculture,
  • 50 units for manufacturing,
  • 0 units for services.

The agricultural sector's production is already calculated as 214.29 units. Now we need to calculate the production level for the manufacturing sector.

To proceed, I'll set up the system of equations based on the given input-output model and solve for the unknowns. Let me calculate the required production for the manufacturing sector.The required production levels for each sector to meet the final demand are:

  • Agriculture: 235.71 units
  • Manufacturing: 285.71 units
  • Services: 264.29 units

Since the question asks for the production level from the manufacturing sector, the answer is:

  • Manufacturing: 285.71 units (rounded to two decimal places).

Would you like more details, or do you have any other questions?

Here are 5 related questions for further exploration:

  1. How do changes in final demand affect the production levels of each sector?
  2. What happens if the input coefficients (e.g., 0.30 for agriculture) are modified?
  3. Can we model more than three sectors using the same method?
  4. What does the matrix AA represent in the context of input-output economics?
  5. How would the system behave if there were an external shock to one of the sectors?

Tip: When solving linear economic models like this, interpreting the matrix (IA)(I - A) as the inverse of inputs can help understand dependencies across sectors.

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Math Problem Analysis

Mathematical Concepts

Linear Algebra
Input-Output Model
Matrix Operations

Formulas

Leontief Input-Output Model: x = (I - A)^-1 * d
Matrix Inversion

Theorems

Leontief Inverse

Suitable Grade Level

College Level