Let A be the technology matrix A where Sector 1 is paper a

Let A be the technology matrix

A =

,

where Sector 1 is paper and Sector 2 is wood. Fill in the missing quantities.

(a)  units of wood are needed to produce one unit of paper.

(b)  units of paper are used in the production of one unit of paper.

(c) The production of each unit of wood requires the use of  units of paper.

	0.4	0.03
0.9	0.02

Solution

Interpretation of given matrix:

0.4 units of paper are required in production of 1 unit of paper

0.03 units of paper are required in production of 1 unit of wood

0.9 units of wood are required in production of 1 unit of paper

0.02 units of wood are required in production of 1 unit of wood

a. Answer: 0.9

b. Answer: 0.4

c. Answer: 0.03