Suppose an economy consists of the Coal, Electric, and Steel sectors. Denote the prices (that is, dollar values) of the total annual outputs of the Coal, Electric, and Steel sectors by PC, PE, and ps, respectively. Suppose the general solution to find equilibrium prices that make each sector's income match its expenditures is Pc = 0.9Ps, PE = 0.94ps, and på is free. One set of equilibrium prices for this economy is pc = $90, PE = $94, and ps = $100. Find another set. Suppose the same economy used Japanese yen instead of dollars to measure the values of the various sector's output. Would this change the problem in any way? Discuss.

Suppose an economy consists of the Coal, Electric, and Steel sectors. Denote the prices (that is, dollar values) of the total annual outputs of the Coal, Electric, and Steel sectors by PC, PE, and ps, respectively. Suppose the general solution to find equilibrium prices that make each sector's income match its expenditures is Pc = 0.9Ps, PE = 0.94ps, and på is free. One set of equilibrium prices for this economy is pc = $90, PE = $94, and ps = $100. Find another set. Suppose the same economy used Japanese yen instead of dollars to measure the values of the various sector's output. Would this change the problem in any way? Discuss.

Linear Algebra: A Modern Introduction

4th Edition

ISBN:9781285463247

Author:David Poole

Publisher:David Poole

Chapter2: Systems Of Linear Equations

Section2.4: Applications

Problem 23EQ: 23. Consider a simple economy with just two industries: farming and manufacturing. Farming consumes...

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