| OCR Text |
Show for dXi/ dW. is zero. However, such a move from " a" to " c" is not expected on a priori grounds for the type of function being postulated. Therefore, what is implicitly assumed with our marginal value concept is that when W^ is increased, Xj is also increased, pari passu, to the level X; + dXj. So, also, are all other inputs increased. We are not explaining these increases, but simply showing the necessary condition that is implied by our first marginal value concept if it is to make any sense. The second definition of marginal value product in terms of income and employment extends the concept to include the indirect effects as well as the direct effect of a change in water allocation policy. By indirect, we mean the increase in income and employment that results from the increase in the levels of activities of all those sectors that are interconnected with each other and with the sector where the change was initiated. In other words, if more water intake is allocated to a particular sector and concurrent with this there is an increase in the final demand for the output of this sector ( this is the implicit assumption we discussed earlier) sufficient to increase the output of the sector enough to demand all the additional water allocated initially to it, other sectors which sell to this sector and others who sell to those who sell to this sector, and so on, will also have to expand their output; hence, income and employment will be further increased. The total effect includes both the direct ( originating initially from the sector starting the many rounds of effects) and indirect effects of this propogation process. In algebraic language, if we let Ajj be the coefficients of the inverse of the ( I- A) matrix for the 39 industrial sectors of the state economy, then the 26 |
