Example 4.  Consider the open five sector economy  [Graphics:Images/LeontiefModelMod_gr_162.gif] consisting of say: Agriculture, Construction, Energy, Manufacturing, and Services where the input-output matrix is given by

[Graphics:Images/LeontiefModelMod_gr_163.gif]  and the demand vector is  [Graphics:Images/LeontiefModelMod_gr_164.gif].  Find the production vector  [Graphics:Images/LeontiefModelMod_gr_165.gif].   

Solution 4.

[Graphics:../Images/LeontiefModelMod_gr_166.gif]



[Graphics:../Images/LeontiefModelMod_gr_167.gif]

We are done!

Aside.  We can verify the solution by direct substitution.

[Graphics:../Images/LeontiefModelMod_gr_168.gif]


[Graphics:../Images/LeontiefModelMod_gr_169.gif]

 

 

Aside.  Any demand vector can be used, it is your choice.  For example:

[Graphics:../Images/LeontiefModelMod_gr_170.gif]



[Graphics:../Images/LeontiefModelMod_gr_171.gif]

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(c) John H. Mathews 2004