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Unformatted text preview: analysis states that the total output is equal to the sum of external demand and internal consumption. Consider two companies A and B such that • for each $1 worth of the product company A produces, it requires $ a 11 of its own product and $ a 21 worth of the product B produces • for each $1 worth of the product company B produces, it requires $ a 12 of the product A produces and $ a 22 worth of its own product (a) Suppose that there is an external demand for $ d 1 of A’s goods and $ d 2 of B’s goods. Derive the necessary linear equations for Fnding the dollar values that A and B should produce. (b) Obtain the conditions for solving (a) for the three cases: a unique solution, no solution, and inFnity of solutions. ( Hint: Farlow (2007), p. 152 ) 2...
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- Spring '10