Homework Help

An economy has two goods: good 1 is plastic and good 2 is petroleum.  The production...

user profile pic

cbromm | Honors

Posted July 21, 2013 at 7:29 PM via web

dislike 1 like

An economy has two goods: good 1 is plastic and good 2 is petroleum.  The production of 1 unit of plastic requires .5 units of plastic and .15 units of petroleum, and the production of 1 unit of petroleum requires .5 units of plastic and .3 units of petroleum.  The external demand is 2 units of plastic and 1 unit of petroleum.  What is the technology matrix A?

 

1 Answer | Add Yours

user profile pic

embizze | High School Teacher | (Level 1) Educator Emeritus

Posted July 22, 2013 at 12:46 AM (Answer #1)

dislike 1 like

The entries in the technology matrix are as follows:

`A=([a_(11),a_(12)],[a_(21),a_(22)])`

`a_(11):` units of product 1 required to make one unit of product 1

`a_(12):` units of product 1 required to make one unit of product 2

`a_(21):` units of product 2 required to make 1 unit of product 1

`a_(22):` units of product 2 to make 1 unit of product 2

Therefore `A=([.5,.5],[.15,.3])` is the technology matrix.

Join to answer this question

Join a community of thousands of dedicated teachers and students.

Join eNotes