Example 15: Closed 2x2 Economy with an Unprofitable Activity

 Production Sectors Consumers
 Markets | X Y W | CONS
 ------------------------------------------------------
 PX | 100  -100 |
 PY | 100 -100 |
 PW | 200 | -200
 PL | -40 -60 | 100
 PK | -60 -40 | 100
 ------------------------------------------------------
 
 
Activity Z is unprofitable at initial equilibrium prices. Therefore, it is not operated, and we cannot infer its technical characteristics from benchmark social accounting data. 
In such situations, we must use other information (such as engineering cost estimates) to determine the unobserved technology. We will assume that sector Z is very similar to sector X, but roughly 10% less efficient. 
Can you guess how this will affect  sector X’s excess tax burden?