DOCSLIB.ORG

The Elements of Input-Output Analysis

Total Page：16

File Type：pdf, Size：1020Kb

Download full-text PDF Read full-text

Load more

Web Book of Regional Science Regional Research Institute 2020 The Elements of Input-Output Analysis William H. Miernyk Follow this and additional works at: https://researchrepository.wvu.edu/rri-web-book Recommended Citation Miernyk, W.H. (1965). The Elements of Input-Output Analysis. Reprint. Edited by Randall Jackson. WVU Research Repository, 2020. This Book is brought to you for free and open access by the Regional Research Institute at The Research Repository @ WVU. It has been accepted for inclusion in Web Book of Regional Science by an authorized administrator of The Research Repository @ WVU. For more information, please contact [email protected]. The Web Book of Regional Science Sponsored by The Elements of Input-Output Analysis By William H. Miernyk (deceased) Professor Emeritus of Economics Director Emeritus of the Regional Research Institute Published: 2006 Updated: February, 2020 *This version of The Elements of Input-Output Analysis which first appeared in The Web Book of Regional Science series was edited by: Randall Jackson Director, Regional Research Institute West Virginia University This work was originally published by Random House, copyright 1957 and 1965. In 2006, copyright was transferred from Random House to the Regional Research Institute. In 1965, Dr. Walter Isard, Wharton School of Finance and Commerce writes, “I welcome the publication of Miernyk’s textbook on input-output analysis. This clear and lucid presentation of the basic elements of input-output will be extremely valuable to my students in Regional Science. It will greatly facilitate my teaching them ’know how’ of this approach.” i <This page blank> ii The Web Book of Regional Science is offered as a service to the regional research community in an effort to make a wide range of reference and instructional materials freely available online. Roughly three dozen books and monographs have been published as Web Books of Regional Science. These texts covering diverse subjects such as regional networks, land use, migration, and regional specialization, include descriptions of many of the basic concepts, analytical tools, and policy issues important to regional science. The Web Book was launched in 1999 by Scott Loveridge, who was then the director of the Regional Research Institute at West Virginia University. The director of the Institute, currently Randall Jackson, serves as the Series editor. When citing this book, please include the following: Miernyk, W.H. (1965). The Elements of Input-Output Analysis. Reprint. Edited by Randall Jackson. WVU Research Repository, 2020. iii <This page blank> iv William H. Miernyk was Professor of Economics and Founding Director of the Regional Research Institute at West Virginia University from 1965-1981. He was Professor of Economics and Director of the Bureau of Economic Research at the University of Colorado. He also taught at Northeastern University and at the Massachusetts Institute of Technology and has served as an economic consultant for private and government agencies. Professor Miernyk received his B.A. (1946) and M.A. (1947) from the University of Colorado, and an M.A. (1952) and Ph.D. (1953) from Harvard University. He was the author/co-writer of twelve books, contributed to twenty-eight additional books, authored more than 144 monographs, articles, and reviews. He received the first Distinguished Scholar Award presented by the Regional Science Association, an international organization with members in 67 nations. Miernyk’s interests and contributions to knowledge focused on a broad set of topics within and beyond regional science. His research interests included such topics as pollution abatement, energy prices, unemployment, labor force participation, and migration in the Appalachian states. He has served as a consultant for, among many others, U.S. Senate committees, the Appalachian Regional Commission, and The World Bank. Known for his critical insight, rigor, and excellence in research, his writing was clear and concise. In addition to numerous contributions to the academic literature, Miernyk extended his sphere of influence to the general public through weekly columns in the Charleston Gazette. v Preface When Wassily Leontief published his “Quantitative Input-Output Relations in the Economic System of the United States” in The Review of Economics and Statistics (August 1936), he launched a quiet revolution in economic analysis that has steadily gained momentum. That the article, which represents a turning point in the development of economic thought, did not at first attract wide attention was partly a matter of timing. The nations of the free world were in the midst of the Great Depression. And John Maynard Keynes had just published his General Theory of Employment, Interest, and Money, a treatise that immediately attracted worldwide attention since it was focused on the problem of chronic unemployment in the capitalist economies of that day. Unlike Keynes, Leontief was not concerned with the causes of disequilibrium in a particular type of economic system during a particular phase of its development. He was interested in the structure of economic systems, in the way the component parts of an economy fit together and influence one another. Leontief fashioned an analytical model that can be applied to any kind of economic system during any phase of its development. As he himself noted, input-output analysis is above all an analytical tool. It can be used in the analysis of a wide variety of economic problems, and as a guide for the implementation of various kinds of economic policies. Input-output analysis is a branch of econometrics, and the technical literature in the field draws heavily on the arcana of mathematics. For the beginning student of economics, and perhaps even for some professional economists, the mathematical nature of the literature has been a barrier. The present book covers the essentials of input-output analysis entirely in nonmathematical terms, although a certain amount of arithmetic is used to illustrate various steps in the analysis. For those who are interested, the last chapter includes a description of the model in elementary mathematical terms and the rudiments of matrix algebra needed to understand the description. The final chapter is largely independent of the remainder of the book - it can be read first or last, or it can be ignored entirely if one is content to accept some of the conclusions reached in earlier chapters without a mathematical demonstration. It should be emphasized that this volume deals with input-output analysis rather than with the statistical problems involved in the construction of an input-output table. It is designed to give the reader an understanding of how the input-output system works; it is not a guide to the construction of an interindustry transactions table. Most of this book deals with a static, open input-output model. This is the model upon which the 1947 tables for the United States were based. These tables were published by the Bureau of Labor Statistics of the U. S. Department of Labor and have been described in detail by W. Duane Evans and Marvin Hoffenberg in “The Interindustry Relations Study for 1947,” The Review of Economics and Statistics (May 1952). A more recent input-output study, based on 1958 data, has been completed by the Office of Business Economics of the U. S. Department of Commerce. A report on this study has been published by Morris R. Goldman, Martin L. Marimont, and Beatrice N. Vaccara in “The Interindustry Structure of the United States,” Survey of Current Business (November 1964). The major difference between the 1947 and 1958 studies is that the latter has been integrated, both conceptually and statistically, with the national income and product accounts regularly published by the U. S. Department of Commerce. The present volume is a complete revision and a substantial expansion of my earlier Primer of Input-Output Economics published by the Bureau of Business and Economic Research, Northeastern University, in 1957. I am grateful to the administration of Northeastern University for permission to use copyrighted material from this publication. Thanks are also due the Harvard University Press for permission to reproduce an illustrative table from the November 1951 issue of the Review of Economics and Statistics. Parts of an earlier draft were read by Professors Walter Isard of the University of Pennsylvania, Charles M. Tiebout, of the University of Washington, and David Rearick, a former colleague at the University of Colorado. I am grateful for their helpful and encouraging comments. The entire manuscript of the earlier vi draft was read by Professor William Letwin of M.I.T. and by two of my graduate research assistants, Mr. John H. Chapman, Jr., and Mr. Kenneth Shellhammer. I wish to thank them for a number of helpful editorial and substantive suggestions. Finally, it is a pleasure to acknowledge the efficient secretarial services provided by Mrs. Mig Shepherd and Mrs. Suzanne Roberts. Needless to say, I alone am responsible for any errors or omissions that remain. Boulder,Colorado WILLIAM H. MIERNYK January, 1965 vii <This page blank> viii Contents Preface vi 1 Introduction 1 Approaches to Economic Analysis....................................1 Economic Interdependence.........................................1 2 Input-Output Analysis 4 The Make-up of the Table.........................................5 Tracing through a Set of Transactions..................................8 Industries and Sectors...........................................8
Recommended publications
  • Integrated Regional Econometric and Input-Output Modeling

    Integrated Regional Econometric and Input-Output Modeling

    Integrated Regional Econometric and Input-Output Modeling Sergio J. Rey12 Department of Geography San Diego State University San Diego, CA 92182 [email protected] January 1999 1Part of this research was supported by funding from the San Diego State Uni- versity Foundation Defense Conversion Center, which is gratefully acknowledged. 2This paper is dedicated to the memory of Philip R. Israilevich. Abstract Recent research on integrated econometric+input-output modeling for re- gional economies is reviewed. The motivations for and the alternative method- ological approaches to this type of analysis are examined. Particular atten- tion is given to the issues arising from multiregional linkages and spatial effects in the implementation of these frameworks at the sub-national scale. The linkages between integrated modeling and spatial econometrics are out- lined. Directions for future research on integrated econometric and input- output modeling are identified. Key Words: Regional, integrated, econometric, input-output, multire- gional. Integrated Regional Econometric+Input-Output Modeling 1 1 Introduction Since the inception of the field of regional science some forty years ago, the synthesis of different methodological approaches to the study of a region has been a perennial theme. In his original “Channels of Synthesis” Isard conceptualized a number of ways in which different regional analysis tools and techniques relating to particular subsystems of regions could be inte- grated to achieve a comprehensive modeling framework (Isard et al., 1960). As the field of regional science has developed, the term integrated model has been used in a variety of ways. For some scholars, integrated denotes a model that considers more than a single substantive process in a regional context.
  • Introduction to Macroeconomics Lecture Notes

    Introduction to Macroeconomics Lecture Notes

    Introduction to Macroeconomics Lecture Notes Robert M. Kunst March 2006 1 Macroeconomics Macroeconomics (Greek makro = ‘big’) describes and explains economic processes that concern aggregates. An aggregate is a multitude of economic subjects that share some common features. By contrast, microeconomics treats economic processes that concern individuals. Example: The decision of a firm to purchase a new office chair from com- pany X is not a macroeconomic problem. The reaction of Austrian house- holds to an increased rate of capital taxation is a macroeconomic problem. Why macroeconomics and not only microeconomics? The whole is more complex than the sum of independent parts. It is not possible to de- scribe an economy by forming models for all firms and persons and all their cross-effects. Macroeconomics investigates aggregate behavior by imposing simplifying assumptions (“assume there are many identical firms that pro- duce the same good”) but without abstracting from the essential features. These assumptions are used in order to build macroeconomic models.Typi- cally, such models have three aspects: the ‘story’, the mathematical model, and a graphical representation. Macroeconomics is ‘non-experimental’: like, e.g., history, macro- economics cannot conduct controlled scientific experiments (people would complain about such experiments, and with a good reason) and focuses on pure observation. Because historical episodes allow diverse interpretations, many conclusions of macroeconomics are not coercive. Classical motivation of macroeconomics: politicians should be ad- vised how to control the economy, such that specified targets can be met optimally. policy targets: traditionally, the ‘magical pentagon’ of good economic growth, stable prices, full employment, external equilibrium, just distribution 1 of income; according to the EMU criteria, focus on inflation (around 2%), public debt, and a balanced budget; according to Blanchard,focusonlow unemployment (around 5%), good economic growth, and inflation (0—3%).
  • 2015: What Is Made in America?

    2015: What Is Made in America?

    U.S. Department of Commerce Economics and2015: Statistics What is Made Administration in America? Office of the Chief Economist 2015: What is Made in America? In October 2014, we issued a report titled “What is Made in America?” which provided several estimates of the domestic share of the value of U.S. gross output of manufactured goods in 2012. In response to numerous requests for more current estimates, we have updated the report to provide 2015 data. We have also revised the report to clarify the methodological discussion. The original report is available at: www.esa.gov/sites/default/files/whatismadeinamerica_0.pdf. More detailed industry By profiles can be found at: www.esa.gov/Reports/what-made-america. Jessica R. Nicholson Executive Summary Accurately determining how much of our economy’s total manufacturing production is American-made can be a daunting task. However, data from the Commerce Department’s Bureau of Economic Analysis (BEA) can help shed light on what percentage of the manufacturing sector’s gross output ESA Issue Brief is considered domestic. This report works through several estimates of #01-17 how to measure the domestic content of the U.S. gross output of manufactured goods, starting from the most basic estimates and working up to the more complex estimate, domestic content. Gross output is defined as the value of intermediate goods and services used in production plus the industry’s value added. The value of domestic content, or what is “made in America,” excludes from gross output the value of all foreign-sourced inputs used throughout the supply March 28, 2017 chains of U.S.
  • Economics 2 Professor Christina Romer Spring 2019 Professor David Romer LECTURE 16 TECHNOLOGICAL CHANGE and ECONOMIC GROWTH Ma

    Economics 2 Professor Christina Romer Spring 2019 Professor David Romer LECTURE 16 TECHNOLOGICAL CHANGE and ECONOMIC GROWTH Ma

    Economics 2 Professor Christina Romer Spring 2019 Professor David Romer LECTURE 16 TECHNOLOGICAL CHANGE AND ECONOMIC GROWTH March 19, 2019 I. OVERVIEW A. Two central topics of macroeconomics B. The key determinants of potential output C. The enormous variation in potential output per person across countries and over time D. Discussion of the paper by William Nordhaus II. THE AGGREGATE PRODUCTION FUNCTION A. Decomposition of Y*/POP into normal average labor productivity (Y*/N*) and the normal employment-to-population ratio (N*/POP) B. Determinants of average labor productivity: capital per worker and technology C. What we include in “capital” and “technology” III. EXPLAINING THE VARIATION IN THE LEVEL OF Y*/POP ACROSS COUNTRIES A. Limited contribution of N*/POP B. Crucial role of normal capital per worker (K*/N*) C. Crucial role of technology—especially institutions IV. DETERMINANTS OF ECONOMIC GROWTH A. Limited contribution of N*/POP B. Important, but limited contribution of K*/N* C. Crucial role of technological change V. HISTORICAL EVIDENCE OF TECHNOLOGICAL CHANGE A. New production techniques B. New goods C. Better institutions VI. SOURCES OF TECHNOLOGICAL PROGRESS A. Supply and demand diagram for invention B. Factors that could shift the demand and supply curves C. Does the market produce the efficient amount of invention? D. Policies to encourage technological progress Economics 2 Christina Romer Spring 2019 David Romer LECTURE 16 Technological Change and Economic Growth March 19, 2019 Announcements • Problem Set 4 is being handed out. • It is due at the beginning of lecture on Tuesday, April 2. • The ground rules are the same as on previous problem sets.
  • Quantitative Aspects of the Economic Growth of Nations: IV. Distribution Of

    Quantitative Aspects of the Economic Growth of Nations: IV. Distribution Of

    Quantitative Aspects of the Economic Growth of Nations: IV. Distribution of National Income by Factor Shares Author(s): Simon Kuznets Reviewed work(s): Source: Economic Development and Cultural Change, Vol. 7, No. 3, Part 2 (Apr., 1959), pp. 1- 100 Published by: The University of Chicago Press Stable URL: http://www.jstor.org/stable/1151715 . Accessed: 19/12/2011 08:16 Your use of the JSTOR archive indicates your acceptance of the Terms & Conditions of Use, available at . http://www.jstor.org/page/info/about/policies/terms.jsp JSTOR is a not-for-profit service that helps scholars, researchers, and students discover, use, and build upon a wide range of content in a trusted digital archive. We use information technology and tools to increase productivity and facilitate new forms of scholarship. For more information about JSTOR, please contact [email protected]. The University of Chicago Press is collaborating with JSTOR to digitize, preserve and extend access to Economic Development and Cultural Change. http://www.jstor.org ECONOMIC DEVELOPMENT AND CULTURAL CHANGE Volume VII, No. 3, Part II April 1959 QUANTITATIVE ASPECTS OF THE ECONOMIC GROWTH OF NATIONS IV. DISTRIBUTION OF NATIONAL INCOME BY FACTOR SHARES* Simon Kuznets, The Johns Hopkins University I. Conceptual Problems The distribution for recent years of national income by shares approxi- mating factor payments can be illustrated by using the United Nations Yearbook of National Accounts Statistics, 1957. 1 The following shares are distinguished: i. Compensation of employees--all wages, salaries, and supplements, whether in cash or kind, to normal residents employed by private and public enterprises, households and non-profit institutions, and general government.
  • A Better Measure of Economic Growth: Gross Domestic Output (Gdo)

    A Better Measure of Economic Growth: Gross Domestic Output (Gdo)

    COUNCIL OF ECONOMIC ADVISERS ISSUE BRIEF JULY 2015 A BETTER MEASURE OF ECONOMIC GROWTH: GROSS DOMESTIC OUTPUT (GDO) The growth of total economic output affects our assessment of current well-being as well as decisions about the future. Measuring the strength of the economy, however, can be difficult as it depends on surveys and administrative source data that are necessarily imperfect and incomplete. The total output of the economy can be measured in two distinct ways—Gross Domestic Product (GDP), which adds consumption, investment, government spending, and net exports; and Gross Domestic Income (GDI), which adds labor compensation, business profits, and other sources of income. In theory these two measures of output should be identical; however, they differ in practice because of measurement error. With today’s annual revision, the Bureau of Economic Analysis (BEA) began publishing a new measure of U.S. output—the “average of GDP and GDI”—which the Council of Economic Advisers (CEA) will refer to as Gross Domestic Output (GDO).1 This issue brief describes GDO, reviews its recent trends, and explains why it can be a more accurate measure of current economic growth and a better predictor of future economic growth than either GDP or GDI alone. What is Gross Domestic Output (GDO)? The first estimate of quarterly GDP is released nearly a month after each quarter’s end. Owing to data lags, GDI What we are calling “GDO” is the average of two existing is generally first released nearly two months after series, the headline Gross Domestic Product (GDP) and quarter’s end, along with the second estimate of GDP.2 its lesser-known counterpart, Gross Domestic Income As a result, with today’s advance GDP release, GDI and (GDI).
  • Input-Output Models and Economic Impact Analysis: What They Can and Cannot Tell Us by Aaron Mcnay, Economist

    Input-Output Models and Economic Impact Analysis: What They Can and Cannot Tell Us by Aaron Mcnay, Economist

    Montana Economy at a Glance April 2013 Input-Output Models and Economic Impact Analysis: What they can and cannot tell us by Aaron McNay, Economist What economic impacts does a new business have in a region when it first opens its doors? What happens to business creation, or job growth, These questions have at when income taxes are increased or tax credits are least one thing in common, provided to businesses? they can each be examined in detail through a process How much does traffic decline on highways known as economic impact and roads when the price of gasoline increases? analysis. At a basic level, economic impact analysis examines the sectors in the area’s economy. For example, what happens economic effects that a business, project, governmental policy, when an automobile manufacturer increases the number of or economic event has on the economy of a geographic area. cars it produces each month? To increase production, the car At a more detailed level, economic impact models work by manufacturer will need to hire more workers, which directly modeling two economies; one economy where the economic increases total employment in the area. However, the car event being examined occurred and a separate economy manufacturer will also need to purchase more aluminum, steel, where the economic event did not occur. By comparing the and other goods that are used in the manufacturing process. two modeled economies, it is possible to generate estimates As the automobile manufacturer purchases more steel and of the total impact the project, businesses, or policy had on other inputs, the manufacturers of the goods, such as steel an area’s economic output, earnings, and employment.
  • Compilation of Production-Based GDP of Macao

    Compilation of Production-Based GDP of Macao

    Compilation of Production-based Gross Domestic Product of Macao Compilation of Macao’s Gross Domestic Product (GDP) is in accordance to the concepts, definitions and classifications of System of National Accounts 1993 (SNA 1993), with considerations to the characteristics of the local economy. In Macao, quarterly and annual GDP at current prices and constant prices are compiled using the expenditure approach, while GDP measured under production approach is compiled only annually at current prices due to lac k of sufficient data. Therefore, expenditure-based GDP is the principal indicator used to measur e the economic growth of Macao. Macao’s annual production-based GDP at basic prices is compiled based on the recommendations of SNA 1993, which is the sum of Gross Value Added (GVA) of all economic activities at basic prices, adding taxes on products, less Financial Intermediation Services Indirectly Measured (FISIM). GVA at basic prices equals value of Gross Output (GO) at basic prices , less value of Intermediate Consumption (IC) at purchasers’ prices. Besides, GVA at producers’ prices (including some of taxes on product) is an important reference to Macao, this is because concession tax (part of taxes on product) collected from concessionaire of water supply, electricity supply, telec ommunications, public car parks, as well as operators of the gaming sector in Macao is deducted from the respective gross receipts or sales revenues, different from value added tax that is collected separately. Hence, concession tax is considered as part of the output generated from activities of the industry and should be included in GVA. As the leading industry of Macao, gaming sector generates enormous amount of tax revenues; however, inclusion of gaming tax in its output will bring in considerable change to both the gaming sector and structure of the entire economy.
  • Fully Dynamic Input-Output/System Dynamics Modeling for Ecological-Economic System Analysis

    Fully Dynamic Input-Output/System Dynamics Modeling for Ecological-Economic System Analysis

    sustainability Article Fully Dynamic Input-Output/System Dynamics Modeling for Ecological-Economic System Analysis Takuro Uehara 1,* ID , Mateo Cordier 2,3 and Bertrand Hamaide 4 1 College of Policy Science, Ritsumeikan University, 2-150 Iwakura-Cho, Ibaraki City, 567-8570 Osaka, Japan 2 Research Centre Cultures–Environnements–Arctique–Représentations–Climat (CEARC), Université de Versailles-Saint-Quentin-en-Yvelines, UVSQ, 11 Boulevard d’Alembert, 78280 Guyancourt, France; [email protected] 3 Centre d’Etudes Economiques et Sociales de l’Environnement-Centre Emile Bernheim (CEESE-CEB), Université Libre de Bruxelles, 44 Avenue Jeanne, C.P. 124, 1050 Brussels, Belgium 4 Centre de Recherche en Economie (CEREC), Université Saint-Louis, 43 Boulevard du Jardin botanique, 1000 Brussels, Belgium; [email protected] * Correspondence: [email protected] or [email protected]; Tel.: +81-754663347 Received: 1 May 2018; Accepted: 25 May 2018; Published: 28 May 2018 Abstract: The complexity of ecological-economic systems significantly reduces our ability to investigate their behavior and propose policies aimed at various environmental and/or economic objectives. Following recent suggestions for integrating nonlinear dynamic modeling with input-output (IO) modeling, we develop a fully dynamic ecological-economic model by integrating IO with system dynamics (SD) for better capturing critical attributes of ecological-economic systems. We also develop and evaluate various scenarios using policy impact and policy sensitivity analyses. The model and analysis are applied to the degradation of fish nursery habitats by industrial harbors in the Seine estuary (Haute-Normandie region, France). The modeling technique, dynamization, and scenarios allow us to show trade-offs between economic and ecological outcomes and evaluate the impacts of restoration scenarios and water quality improvement on the fish population.
  • Leon Moses and Walter Isard: Collaborators, Rivals Or Antagonists?

    Leon Moses and Walter Isard: Collaborators, Rivals Or Antagonists?

    Leon Moses and Walter Isard: Collaborators, Rivals or Antagonists? David Boyce Archivist, Regional Science Association International Program Chair or Co-Chair, North American Regional Science Meetings, 1970-1989 Ph.D., Regional Science, University of Pennsylvania, 1965 Objectives of this talk • Examine contributions of Leon to regional science Research on interindustry models and industrial location theory Participation in the Regional Science Association Contributions to the field of regional science • Explore the relationship between Leon and Walter Isard, founder of regional science LEON MOSES • Born: New York City 1924 • Ohio State University B.A. 1945 • Harvard University M.A. 1950 Ph.D. 1952 • Part-time and visiting teaching appointments 1946-52 • Research Associate, Harvard Econ. Res. Project 1952-59 • Assistant Professor, Harvard 1957-59 • Associate Professor of Economics, Northwestern 1959-63 – Assistant Director, Research, Transportation Center 1959-63 • Professor of Economics, Northwestern 1963-05 • Director, Transportation Center 1974-79 • Professor Emeritus of Economics, Northwestern 2005 • Died: age 88, Evanston, Illinois 2013 WALTER ISARD • Born: Philadelphia 1919 • Temple University A.B. 1939 1935-39 • University of Chicago 1941-42 • Harvard University M.A. 1941 Ph.D. 1943 • Social Science Research Council 1942-43, 1946-48 • Part-time and visiting teaching appointments 1946-49 • Research Fellow, Associate, Econ. Research Project Lecturer, Harvard University 1949-53 • Associate Professor of Reg. Economics, M.I.T. 1953-56
  • PRINCIPLES of MICROECONOMICS 2E

    PRINCIPLES of MICROECONOMICS 2E

    PRINCIPLES OF MICROECONOMICS 2e Chapter 8 Perfect Competition PowerPoint Image Slideshow Competition in Farming Depending upon the competition and prices offered, a wheat farmer may choose to grow a different crop. (Credit: modification of work by Daniel X. O'Neil/Flickr Creative Commons) 8.1 Perfect Competition and Why It Matters ● Market structure - the conditions in an industry, such as number of sellers, how easy or difficult it is for a new firm to enter, and the type of products that are sold. ● Perfect competition - each firm faces many competitors that sell identical products. • 4 criteria: • many firms produce identical products, • many buyers and many sellers are available, • sellers and buyers have all relevant information to make rational decisions, • firms can enter and leave the market without any restrictions. ● Price taker - a firm in a perfectly competitive market that must take the prevailing market price as given. 8.2 How Perfectly Competitive Firms Make Output Decisions ● A perfectly competitive firm has only one major decision to make - what quantity to produce? ● A perfectly competitive firm must accept the price for its output as determined by the product’s market demand and supply. ● The maximum profit will occur at the quantity where the difference between total revenue and total cost is largest. Total Cost and Total Revenue at a Raspberry Farm ● Total revenue for a perfectly competitive firm is a straight line sloping up; the slope is equal to the price of the good. ● Total cost also slopes up, but with some curvature. ● At higher levels of output, total cost begins to slope upward more steeply because of diminishing marginal returns.
  • Front Matter, Input-Output Analysis: an Appraisal

    Front Matter, Input-Output Analysis: an Appraisal

    This PDF is a selection from an out-of-print volume from the National Bureau of Economic Research Volume Title: Input-Output Analysis: An Appraisal Volume Author/Editor: Volume Publisher: Princeton University Press Volume ISBN: 0-870-14173-2 Volume URL: http://www.nber.org/books/unkn55-2 Publication Date: 1955 Chapter Title: Front matter, Input-Output Analysis: An Appraisal Chapter Author: Raymond W. Goldsmith Chapter URL: http://www.nber.org/chapters/c2862 Chapter pages in book: (p. -10 - 0) Input-Output Analysis: An Appraisal Studies in Income and Wealth Volume Eighteen BY THE CONFERENCE ON RESEARCH IN INCOME AND WEALTH A BEPORT OF THE NATIONAL BUIiEAU OF ECONOMIC BESEABCH, NEW YOPX —S — PUBLISHEDBY PRINcETON UNIVERSITY PRESS, PRINCETON 1955 Copyright, 1955, Princeton University Press L.C. CARDNO.55-5007 Second Printing, 1956 Third Printing, 1982 Fourth Printing, 1968 Printed in the United States of America Input-Output Analysis: An Appraisal NATIONAL BUREAU OF ECONOMIC RESEARCH CONFERENCE ON RESEARCH IN INCOME AND WEALTH NATIONAL BUREAU OF ECONOMIC RESEARCH 1956 OFFICERS Harry Scherman, Chairman Gottfried Haberler, President George B. Roberts, Vice-President and Treasurer W. J. Carson, Executive Director DIRECTORS AT LARGE Wallace J. Campbell, Director, Cooperative League of the USA Solomon Fabricant, New York University Albert J. Hettinger, Jr., Lazard Frères and Company Oswald W. Knauth, Beau fort, South Carolina H. W. Laidler, Executive Director, League for Industrial Democracy Shepard Morgan, Norfolk, Connecticut George B. Roberts, Vice-President, The First National City Bank of New York Beardsley Rumi, New York City Harry Scherman, Chairman, Book-of-the-Month Club George Soule, Bennington College N.