Sector Output
1. **State the problem:** We have an economy with three sectors: agriculture, manufacturing, and energy. Each sector requires inputs from all three sectors to produce one dollar's worth of output. We want to find the total output of each sector needed to satisfy a final demand of 50 billion for agriculture, 27 billion for manufacturing, and 46 billion for energy.
2. **Set up the input-output matrix and final demand vector:**
Let $x_a$, $x_m$, and $x_e$ be the total outputs of agriculture, manufacturing, and energy respectively.
Input coefficients matrix $A$:
$$
A = \begin{bmatrix}
0.30 & 0.30 & 0.20 \\
0.20 & 0.20 & 0.30 \\
0.20 & 0.40 & 0.40
\end{bmatrix}
$$
Final demand vector $d$:
$$
d = \begin{bmatrix}50 \\ 27 \\ 46\end{bmatrix}
$$
3. **Formulate the system:**
The total output vector $x$ satisfies:
$$
x = Ax + d$$
which can be rearranged to:
$$
(I - A)x = d
$$
where $I$ is the identity matrix.
4. **Calculate $I - A$:**
$$
I - A = \begin{bmatrix}
1-0.30 & -0.30 & -0.20 \\
-0.20 & 1-0.20 & -0.30 \\
-0.20 & -0.40 & 1-0.40
\end{bmatrix} = \begin{bmatrix}
0.70 & -0.30 & -0.20 \\
-0.20 & 0.80 & -0.30 \\
-0.20 & -0.40 & 0.60
\end{bmatrix}
$$
5. **Solve the system $(I - A)x = d$:**
We solve for $x$ by computing:
$$
x = (I - A)^{-1} d
$$
Using matrix inversion and multiplication (rounded to six decimals):
Inverse matrix $(I - A)^{-1}$ approximately:
$$
\begin{bmatrix}
1.818182 & 0.818182 & 0.636364 \\
0.545455 & 1.363636 & 0.818182 \\
0.727273 & 0.909091 & 1.818182
\end{bmatrix}
$$
Multiply by $d$:
$$
x = \begin{bmatrix}
1.818182 & 0.818182 & 0.636364 \\
0.545455 & 1.363636 & 0.818182 \\
0.727273 & 0.909091 & 1.818182
\end{bmatrix} \begin{bmatrix}50 \\ 27 \\ 46\end{bmatrix} = \begin{bmatrix}
1.818182 \times 50 + 0.818182 \times 27 + 0.636364 \times 46 \\
0.545455 \times 50 + 1.363636 \times 27 + 0.818182 \times 46 \\
0.727273 \times 50 + 0.909091 \times 27 + 1.818182 \times 46
\end{bmatrix}
$$
Calculate each component:
- Agriculture output:
$$
= 90.9091 + 22.0909 + 29.2727 = 142.2737
$$
6. **Final answer:**
The output of the agricultural sector needed is approximately **142.274 billion dollars** (rounded to three decimal places).