Question

Please solve problems in matrix.

3 Section 1.6 Applications Assume this simplistic economic system is broken down into three basic outputs which are Chemicals, Fuel, and Machinery. Chemicals sells 30% of its output to Fuel and 50% to Machinery and consumes the remainder. Fuel sells 80% of its output to Chemical and 10% to Machinery and retains the rest. Machinery sells 40% to Chemicals, 40% to Fuel and retains the rest. Production for each industry is listed down the columns and the purchases for respective industry is read across the rows and in this table. Chemical Fuel Machinery Purchased by Chemical 0.20 0.30 0.50 0.80 0.10 0.10 0.40 0.40 0.20 Fuel Machinery Find the equilibrium price for each sector where its income matches its expenses.

Answer 1

4. Calculating total tax liability:

Particulars	Calculations	Amount ($)
Taxable income		10,000,000
(-) local taxes	$ 10 million x 10%	(1,000,000)
		9,000,000
(-) state taxes	$ 9,000,000 x 20%	(1,800,000)
		7,200,000
(-) federal taxes	$ 7,200,000 x 50%	(3,600,000)
		3,600,000

Therefore, total tax liability of the corporation is = $ 1,000,000 + $ 1,800,000 + $ 3,600,000 = $ 6,400,000