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Consider the economy of Israel in 1958. The three industries considered here are

I1:鈥塧驳谤颈肠耻濒迟耻谤别,I2:鈥尘补苍耻蹿补肠迟耻谤颈苍驳,I3:鈥塭苍别谤驳测

Outputs and demands are measured in millions of Israeli pounds, the currency of Israel at that time. We are told that

b=[13.217.61.8],1=[0.2930.0140.044],2=[00.2070.01],3=[00.0170.216]

a. Why do the first components of2 and3 equal0 ?

b. Find the outputs x1, x2, x3required to satisfy demand.

Short Answer

Expert verified

a. As the sectors of energy and manufacturing do not make demand on the agriculture sector, so, the first components of 2and 3equals 0.

b. x145.05,x281.95,x34.63are the values that satisfy the demand.

Step by step solution

01

(a)Step 1: Consider the relation between the industries of agriculture, manufacturing and energy

The demand vector for the industry Iiis represented by the vectori.

The vector2 represents the manufacturing industry and the vector 3represents the energy industry.

As manufacturing and the energy industries does not make any kind of demand on agriculture industry, thus, the vectors of manufacturing and the energy industries equal zero.

02

(b)Step 2: Consider the values of the vectors of industries

The vector values of the agriculture, manufacturing and the energy industries are,

b=[13.217.61.8],1=[0.2930.0140.044],2=[00.2070.01],3=[00.0170.216]

The demand function is written as,b=x11+x22+x33b=x11+x22+x33.

role="math" localid="1659671682712" [13.217.61.8]=x1[0.2930.0140.044]+x2[00.2070.01]+x3[00.0170.216][13.217.61.8]=[0.293000.0140.2070.0170.0440.010.216][x1x2x3]

Therefore, the matrix form is,

[0.2930013.20.0140.2070.01717.60.0440.010.2161.8]

03

Solve the matrix

Consider the matrix.

[0.2930013.20.0140.2070.01717.60.0440.010.2161.8]

Using row Echelon form to reduce the matrix.

[10045.0501081.950014.63]

The values are: x145.05,x281.95,x3|4.63|

As the output cannot be negative, thus, the values will be,

x145.05,x281.95,x34.63

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