Assignment No.

03 Name of the Assignment

Date: 03/04/2023 Input-Output analysis

Problem 1

Problem 2

Problem 3

In an economy, there are two industries P1 and P2 and the following table gives the supply and
the demand position in cores.

Production Consumption sector

Final demand Gross output
Sector P1 P2
P1 10 25 15 50
P2 20 30 10 60

Determine the output when the final demand changes to 35 for P1 and 42 for P2
Problem 4
An economy produces only coal and steel. These two commodities serve as intermediate inputs
in each other’s production. 0.4 tonne of steel and 0.7 tonne of coal are needed to produce a tonne
of steel. Similarly 0.1 tonne of steel and 0.6 tonne of coal are required to produce a tonne of coal.
No capital inputs are needed. Do you think that the system is viable? 2 and 5 labour days are
required to produce a tonne of coal and steel respectively. If economy needs 100 tonnes of coal
and 50 tonnes of steel, calculate the gross output of the two commodities and the total labour
days required.

Problem 5

Suppose an economy consists of three industries F, C, and T. Each of the industries produces for
internal consumption among themselves, as well as for external demand by the consumer. The
table shows the use of each industry's production, in dollars.

F C T Demand Total
F 40 50 60 100 250
C 30 40 40 110 220
T 20 30 30 120 200
Find the proportion of the amounts consumed by each of the industries.

Problem 6

Each year, sector A purchases $5 million of goods from sector B and $10 million from sector C.
Sector B makes annual purchases of $2 million from sector A and $8 million from sector C.
Annual purchases of sector C are $3 million from sector A and $6 million from sector B. Within
sector purchases are $1 million for sector A, $4 million for sector B, and $5 'million for sector C.
Total sales in the sectors are $20 million, $20 million, and $30 million, respectively.

a. Write the transactions matrix for the three sectors.

b. How much is value added for sector A?
c. How much is final demand in sector A?
d. What should be the gross output of each sector?