Winner's curse is likely to happen in which of the following auctions?
A) unexplored oil reserves
B) corn stored in a warehouse
C) 1,000 ton of iron ore
D) U.S. Treasury Bonds
A
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Answer the following statement(s) true (T) or false (F)
1 A farmer has a comparative advantage at growing wheat if his cost of growing wheat is smaller than his cost of growing any other crop. 2. A farmer has a comparative advantage at growing wheat if his cost of growing wheat is less than the cost of another farmer growing wheat. 3. By definition, someone who has an absolute advantage must also have a comparative advantage. 4. If there are only two activities on which a person can work, and there are two people to do the work, then it is impossible for one person to have a comparative advantage in both activities. 5. By definition, someone who has a comparative advantage in producing soft drinks must also have an absolute advantage in producing soft drinks.
At a competitive market equilibrium, if there are no taxes, subsidies, price regulations, quantity regulations, or externalities, i. consumer surplus is minimized. ii. marginal cost equals marginal benefit. iii. resources are efficiently used
iv. producer surplus is minimized. A) ii and iii B) i and ii C) i and iv D) i, ii, iii, and iv E) ii only
If the price elasticity of demand for peanut butter is 2.4, then peanut butter
A) has an elastic demand. B) has an inelastic demand. C) has a unit elastic demand. D) is a normal good.
If Sam is willing to pay $50 for one good X, $30 for a second, $20 for a third, $8 for a fourth, and the market price is $10, then Sam's consumer surplus is:
a. $10 b. $40. c. $70 d. $100.