An automobile mechanic (M) and a body shop (B) use each other's services. For each $1.00

Chapter 1, Problem 1

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An automobile mechanic (M) and a body shop (B) use each other's services. For each $1.00 of business that M does, it uses $0.50 of its own services and $0.25 of B's services, and for each $1.00 of business that B does it uses $0.10 of its own services and $0.25 of M's services. (a) Construct a consumption matrix for this economy. (b) How much must M and B each produce to provide customers with $7000 worth of mechanical work and $14,000 worth of body work?

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