Solve the Problem. -A Textbook Economy Has Only Two Industries, the Electric Company

question 7

Multiple Choice

Solve the problem.
-A textbook economy has only two industries, the electric company and the gas company. Each dollar's worth of the electric company's output requires 0.20 of its own output and 0.4 of the gas company's output. Each dollar's
Worth of the gas company's output requires 0.50 of its own output and 0.7 of the electric company's output.
What should the production of electricity and gas be (in dollars) if there is a $16 M demand for electricity and a $7
M demand for gas?

• A) Electricity: $107.5 M; Gas: $100 M
• B) Electricity: $125 M; Gas: $92.5 M
• C) Electricity: $115 M; Gas: $103.5 M
• D) Electricity: $97.5 M; Gas: $103 M

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Definitions:

Iron Ore

Naturally occurring rocks from which iron (Fe) can be economically extracted, constituting a key raw material for steel production.

Coal

The natural, brown to black rock derived from peat and other plant materials that have been buried, compacted, and heated; used for heating and to generate electricity.

Marine Organisms

Living creatures that inhabit the ocean, ranging from microscopic phytoplankton to large whales, adapted to the marine environment.

Organic Material

Matter derived from living organisms, including plants, animals, and their byproducts, which can decompose into soil.