Chapter 4.5, Problem 29E

Mexico Economy Economists generally divide a country’s economy into three broad sectors: primary, secondary, and tertiary. The primary sector is the sector using natural resources to produce raw materials, and includes oil extraction, agriculture, mining, and fishing. The secondary or industrial sector is the sector that uses raw materials to produce manufactured goods, and includes oil refining, textiles, and electronics. The tertiary or services sector provides services, and includes tourism, financial services, and health care. Exercises 25–30 are based on the following technology matrix for Mexico in 2008. (The sectors are in the order primary, secondary, and tertiary, and entries are rounded to two decimal places.)³⁶

$A=\left[\begin{array}{ccc}0.09& 0.03& 0.00\\ 0.14& 0.23& 0.08\\ 0.07& 0.12& 0.15\end{array}\right]$

Determine how the three sectors of the Mexico economy would react to a decrease in demand for tourism (tertiary sector) of 1,000 billion pesos and an increase in the demand for raw materials of 2,000 billion pesos.