Question

Suppose an economy has only two sectors: Goods and Services. Each year, Goods sells 80 % of its outputs to Services and keeps the rest, while Services Goods Services sells 73% of its output to Goods and retains the rest. Find equilibrium prices for the annual outputs of the Goods and Services sectors that make each sector's income match its expenditures. .dollar values) f the total annual outputs of the Goods and Services sectors by PG and ps, respectively. Denote the prices (that If ps $1000, then p S(Type an integer or a decimal.)

Answer 1

Answer:

  If PG = $7300, then PS = $8000

Step-by-step explanation:

You want the cost of the transfer in each direction to be the same, so ...

  0.80PG = 0.73PS

  PG/PS = 0.73/0.80 = 73/80

Expressed another way:

  PG : PS = 73 : 80

Here, we have chosen to multiply these numbers by 100 to give the values PG = 7300 and PS = 8000 in order to achieve the desired ratio.