Explain why it is unwise to bid more than your valuation of the good in a sealed bid second-price auction
What will be an ideal response?
Assume you have a valuation of the good equal to $50. The price the winning bidder pays is equal to the second highest bid. If you bid $70 and win, you will pay less than $50 if the second-highest bid (SHB) is less or equal to $50. In this case you are as well off as bidding $50. If you end up paying more you lose because you are paying more than your valuation of the good. So you are either as well off or worse off than bidding your highest valuation.
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Refer to Mexico and Japan. What is the cost of producing one unit of food in Japan?
a. 2 bolts of cloth per bushel.
b. 4/3 bolts of cloth per bushel.
c. 3/4 bolts of cloth per bushel.
d. none of the above.
Each of these is a basic characteristic of a capitalist economy, except
A. the institution of private property. B. central planning. C. laissez-faire. D. individuals acting in their own self-interest.
Refer to the information provided in Figure 15.3 below to answer the question(s) that follow. 
Figure 15.3 Refer to Figure 15.3. Gwen's Country Curtains is currently manufacturing 1,000 pairs of curtains per month. This firm
A. should reduce the number of pairs of curtains it manufacturers to maximize profit. B. should increase the number of pairs of curtains it manufacturers to maximize profit. C. could increase profits by either increasing or decreasing the number of pairs of curtains it manufactures. D. should continue to produce 1,000 pairs of curtains; it is already maximizing profits.
The percentage of income that Americans save each year ________
A) is much higher than the percentage the Chinese citizens save B) is higher than the saving rate of most industrialized countries C) is lower than the saving rate of most industrialized countries D) increased by a factor of five every year since the 1970s E) none of the above