An economy has a manufacturing industry and a banking industry. Each unit of manufacturing output requires inputs of 0.5 unit of manufacturing and 0.2 unit of banking. Each unit of banking output requires inputs of 0.3 unit each of manufacturing and banking. If surpluses of 133 units of manufacturing and 100 units of banking are desired, find the gross production of each industry.

Question

An economy has a manufacturing industry and a banking industry. Each unit of manufacturing output requires inputs of 0.5 unit of manufacturing and 0.2 unit of banking. Each unit of banking output requires inputs of 0.3 unit each of manufacturing and banking. If surpluses of 133 units of manufacturing and 100 units of banking are desired, find the gross production of each industry. ​

Quizplus · Accepted Answer

To find the gross production required for each industry, we can set up equations based on the input-output model given. Let M be the gross manufacturing output and B be the gross banking output. The equations based on the problem statement are:For manufacturing: M = 0.5M + 0.2B + 133For banking: B = 0.3M + 0.3B + 100Solving these equations simultaneously gives us M = 424 and B = 264.

An Economy Has a Manufacturing Industry and a Banking Industry