MATLAB's linear algebra capabilities make it a good vehicle for studying linear economic models, sometimes called Leontief models (after their primary developer, Nobel Prize-winning economist Wassily Leontief) or input-output models. We will give a few examples. The simplest such model is the linear exchange model or closed Leontief model of an economy. This model supposes that an economy is divided into, say, n sectors, such as agriculture, manufacturing, service, consumers, etc. Each sector receives input from the various sectors (including itself) and produces an output, which is divided among the various sectors. (For example, agriculture produces food for home consumption and for export, but also seeds and new livestock, which are reinvested in the agricultural sector, as well as chemicals that may be used by the manufacturing sector, and so on.) The meaning of a closed model is that total production is equal to total consumption. The economy is in equilibrium when each sector of the economy (at least) breaks even. For this to happen, the prices of the various outputs have to be adjusted by market forces. Let a _ij denote the fraction of the output of the jth sector consumed by the ith sector. Then the a _ij are the entries of a square matrix, called the exchange matrix A, each of whose columns sums to 1. Let p _i be the price of the output of the ith sector of...