Unformatted text preview: dete erminant ca be found similarly a follows: an d as o s we d minant of the 4 4 So bringing all of the terms together w can find the determ nology matrix for the c closed input output m t model as: techn T = 0.384 0.1152 0.1152 0.1536 0 T = 0 s, x ot s ertible). This implies Thus the matrix T does no have rank (and thus is not inve (as e expected) th there is no unique solution to the closed input out hat tput model, , simp output ra ply atios. 234 mework: Hom 1. Using th open mo he odel example shown in the class notes, if the final n e demand vector for t three se the ectors is: what will be the solution output lev w vels for the three indus stries? (Round your answers to two decima places). t al 2. Recall th input co-efficient ma he atrix from our open mo odel examp ple... a) What is the econom meaning of the elements a22 = 0.1, a23 = 0.2, and t mic g a31 = 0.1? b) What is the econom meaning (if any) of the first co t mic g f olumn sum? ? c) What is the econom meaning (if any) of the first row sum? t mic g f w 3. In a two industry ec conomy it is known tha Industry 1 uses 10 of its own s at product and 60 of commodity 2 to produ a dollar worth of c a y uce rs commodity 1. It is also known t that Industr 2 uses none of its o ry own product but uses t 50 of co ommodity 1 to produce a dollars w e worth of co ommodity 2. The open n sector de emands are $1000 billion of comm e modity 1 an $2000 billion of nd commodity 2. a) Write out the inp co-efficient matrix, the techno put ology matrix and the x, specific input o output matr for this o rix open econo omy. b) Find the solution to the output levels u t n using the m method show in class. wn . 235 ECON 301 LECTURE #14 PUBLIC GOODS We want to introduce the concept of public goods into the theory of welfare economics. The economic theory that we have studied so far deals exclusively with private goods (i.e. goods that are privately owned by agents in the economy. The existence of public goods in the real world requires i...
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This note was uploaded on 05/25/2010 for the course ECON 301 taught by Professor Sning during the Spring '10 term at University of Warsaw.
- Spring '10