Solve the Problem. -An Economy Is Based on Two Sectors, Agriculture and Manufacturing

question 41

Essay

Solve the problem.
-An economy is based on two sectors, agriculture and manufacturing. Production of a dollar's worth of
agriculture requires an input of $0.40 from agriculture and $0.10 from manufacturing. Production of a dollar's
worth of manufacturing requires an input of $0.20 from agriculture and $0.30 from manufacturing. Find the
output for each sector that is needed to satisfy a final demand of $16 billion for agriculture and $32 billion for
manufacturing.

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Definitions:

Coconut Consumption

The act of using coconuts, either by eating or in the production of products such as oil, within an economic system.

Competitive Market

A market structure characterized by a large number of buyers and sellers, so no single participant has significant market power.

Profit Maximization

The operation by which businesses deduce the pricing and quantity of output that maximizes profit gains.

Ore

Naturally occurring minerals or rock from which valuable metals or other elements can be extracted profitably.