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An economy consists of the three sectors agriculture, energy, and manufacturing. For each $1 worth of output, the agriculture sector requires $.08 worth of input from the agriculture sector, $.10 worth of input from the energy sector, and $.20 worth of input from the manufacturing sector. For each $1 worth of output, the energy sector requires $.15 worth of input from the agriculture sector, $.14 worth of input from the energy sector, and $.10 worth of input from the manufacturing sector. For each $1 worth of output, the manufacturing sector requires $.25 worth of input from the agriculture sector, $.12 worth of input from the energy sector, and $.05 worth of input from the manufacturing sector.
(a) Give the input-output matrix A for this economy.
(b) Determine the matrix (I-A)-1. Round entries to two decimal places.
(c) At what level of output should each sector produce to meet a demand for $4 billion worth of agriculture, $3 billion worth of energy, and $2 billion worth of manufacturing?
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