A particular open economy has
three industries: coal-mining
operations, electricity-generating
plants, and auto-manufacturing
plants. To produce Re 1 of coal,
the mining operation must
purchase Re 0.1 of its own
production, Rs 0.30 of electricity,
and Re 0.1 worth of automobiles
for its transportation. To produce
Re 1 of electricity, it takes Rs 0.25
for coal, Rs 0.4 for electricity, and
Rs 0.15 for the automobile. Finally,
to produce Re 1 worth of
automobiles, the automanufacturing plant must purchase
Rs 0.2 of coal, Rs 0.5 of electricity,
and consume Rs 0.1 of
automobiles. Also assume that
during a period of one week, the
economy has an exterior demand
of Rs 50 000 worth of coal, Rs 75
000 worth of electricity, and
Rs 125 000 worth of autos. Study
the Leontief Input-Output Model
and find the production level of
each of the three industries in that
period of one week to exactly
satisfy both the internal and the
external demands
