Let $A = \left[ \begin{array} { l l }
0.9 & 0.2 \
0.4 & 0.5
\end{array} \right]$ be the technology matrix, $X = \left[ \begin{array} { l }
x _ { 1 } \
x _ { 2 }
\end{array} \right]$ be the production vector, and $D = \left[ \begin{array} { c }
4,000 \
12,000
\end{array} \right]$ be the external demand vector.

There would be 0.4 units of sector 2 needed to produce one unit of sector 2.

Question

Let $A = \left[ \begin{array} { l l } 
0.9 & 0.2 \
0.4 & 0.5
\end{array} \right]$ be the technology matrix, $X = \left[ \begin{array} { l } 
x _ { 1 } \
x _ { 2 }
\end{array} \right]$ be the production vector, and $D = \left[ \begin{array} { c } 
4,000 \
12,000
\end{array} \right]$ be the external demand vector.
 
There would be 0.4 units of sector 2 needed to produce one unit of sector 2.

Quizplus · Accepted Answer

The technology matrix $A$ shows the input from sectors needed to produce one unit in each sector. To find the units of sector 2 needed to produce one unit of sector 2, we look at the second row, second column of $A$, which is 0.5, not 0.4. This means 0.5 units of sector 2 are needed to produce one unit of sector 2.

Let A=[0.90.20.40.5]A = \left[ \begin{array} { l l } 0.9 & 0.2 \\0.4 & 0.5\end{array} \right]A=[0.90.4​0.20.5​]

Let $A = \left[ \begin{array} { l l } 0.9 & 0.2 \\0.4 & 0.5\end{array} \right]$