Q7. A hypothetical economy produces only two commodities X and Y. The two commodities serve as intermediate input in each other’s production. To produce one unit of X, 0.6 unit of X and 0.1 unit of Y are needed. Similarly, to produce one unit of Y, 0.7 unit of X and 0.4 unit of Y are needed. If economy requires 100 units of X and 50 units of Y for final consumption, find the gross output of each of the two commodities.

Solution