N3

A certain economy is divided into four sectors, namely S1;S2;S3, and S4. For each unit of its output, sector S1 requires 0.1 units from sector S1, 0.2 units from S2, 0.3 units from S3, and 0.4 units from S4; sector S2 requires 0.2 units from sector S1, 0.1 units from S4, and nothing from S2 and S3; sector S3 requires 0.2 units from sector S2, 0.1 units from S3, and nothing from S1 and S4; and sector S4 requires 0.3 units from sector S1, 0.2 units from S2, 0.4 units from S4, and nothing from S3.

(a) Determine the consumption matrix for this economy.

(b) For next year, the management is planning the following production levels: 10 units for sector S1, 20 units for sector S2, 30 units for sector S3, and 40 units for sector S4. Calculate the vector of intermediate demand to determine whether or not this plan is feasible. Explain!

(c) Determine the production level that satisfies a final demand of 2 units for sector S1, 4 units for sector S2, 3 units for sector S3, and 5 units for sector S4.