The task is to describe multiplier effects in the Grapetown economy using three related industries. The first industry is Wine Manufacturing (ANZSIC Code 1214), for which the proportion of local consumption is 0.6. Total employment in metropolitan area is 20,000 in this industry and equilibrium wage is $7,000.

  1. Select and define two additional related industries. Describe why they are related to Wine Manufacturing and define their proportion of local consumption in the language of economics [15 points].

  2. Describe the economic effects in dollars of the following changes: an increase in export income in Wine Manufacturing by $1,000,000, a $750,000 increase in export income for your second industry, and decrease of $300,000 in export income for your third industry [15 points].

  3. Using graphs demonstrate the multiplier direct and indirect effects for one of the two industries you have chosen [10 points]. 


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