An economy produces only two commodities X and Y. The two commodities

An economy produces only two commodities X and Y. The two commodities serve as intermediate input in each other’s production. To produce a unit of X, 0.2 unit of X and 0.6 unit of Y are needed. Similarly, to produce a unit of Y, 0.4 unit of X and 0.3 unit of Y are needed. 30 and 50 labour hours are required to produce a unit of X and a unit of Y respectively. The wage rate is Rs. 20 per labour hour. If the final demand of X increases by 1500 units and that of Y decreases by 1200 units, find: (i) (ii) Change in the gross output of each of the two commodities. Change in the labour requirement. (iii) Change in the value added in two producing sectors.

Answer»

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1)50

2)40

3)10