Consider an antique auction where bidders have independent private values. There are two bidders, each of whom perceives that valuations are uniformly distributed between $100 and $1,000. One of the bidders is Sue, who knows her own valuation is $200. What is Sue's optimal bidding strategy in a second-price, sealed-bid auction?
A. Submit a bid that is less than $150.
B. Submit a bid of $150.
C. Submit a bid of $200.
D. Yell "mine" when the bid reaches $150.
Answer: C
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Refer to the figure above. If the capital stock is fixed at $300, what is the consumption in the economy?
A) $3,000 B) $4,000 C) $2,000 D) $5,000
Refer to Figure 9-1. Based on the graph of the labor market above, if a minimum wage of $8 per hour is imposed, which of the following will result?
A) The quantity of labor demanded by firms will rise. B) The quantity of labor demanded by firms will fall. C) The unemployment rate will fall. D) Both A and C will occur.
In the long run, a monopolistically competitive firm
A) earns zero economic profit. B) produces at minimum average cost. C) operates at full capacity. D) All of the above.
Net taxes are: a. taxes plus transfer payments
b. taxes minus transfer payments. c. an injection into the economic system. d. consumption after taxes. e. government spending minus taxes.