A Closed Model for an Economy Identifies Government, the Profit

question 112

Multiple Choice

A closed model for an economy identifies government, the profit sector, the nonprofit sector, and households as its industries. Each unit of government output requires 0.3 unit of government input, 0.2 unit of profit sector input, 0.2 unit of nonprofit sector input, and 0.4 unit of households input. Each unit of profit sector output requires 0.2 unit of government input, 0.3 unit of profit sector input, 0.2 unit of nonprofit sector input, and 0.4 unit of households input. Each unit of nonprofit sector output requires 0.2 unit of government input, 0.2 unit of profit sector input, 0.2 unit of nonprofit sector input, and 0.6 unit of households input. Each unit of households output requires 0.05 unit of government input, 0.2 unit of profit sector input, 0.2 unit of nonprofit sector input, and 0.25 unit of households input. Write the augmented matrix for this closed model of the economy. ​

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Definitions:

Long-Run Supply Curve

A curve showing the relationship between price and quantity supplied over time, assuming all factors of production can be varied.

Productive Efficiency

A state where goods or services are produced at the lowest possible cost, utilizing all resources efficiently.

Average Total Cost

The total cost divided by the quantity produced, indicating the cost to produce each unit of output.

Resource Prices

The cost associated with acquiring resources necessary for production, including raw materials, labor, and capital.