A4 Suppose that the love-for-variety parameter in the Dixit-Stiglitz model is equal 0.22.The absolute value of price elasticity of demand is then equal:Answer: Suppose in a Heckscher-Ohlin model a country's output vector isx = [5,3,6), the world's output is XW = [1000,900,1000], the price vector is p = [5,2,3) andthe commonly used input-output matrix is:A =|1where the first row describes labour coefficients, the second row describes land coefficient, and the third row describes capital coefficients. All countrieshave identical homothetic preferences and balanced trade.Find the country GDP.Answer:

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Suppose that the love-for-variety parameter in the Dixit-Stiglitz model is equal 0.22. The absolute value of price elasticity of demand is then equal:

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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