In a standard highest sealed-bid auction, a bidder's best strategy:
A. requires the bidder to understand game theory to bid properly.
B. is to bid slightly more than what he or she expects the second highest bidder to bid.
C. is to bid what he or she would be willing to pay.
D. always ensures that the person who wants it the most will get the bid.
Answer: B
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Noise traders
A) tend to lose money on stock trades, but help to stabilize the market. B) tend to make higher returns than do "buy-and-hold" investors. C) create additional risk in the market by increasing price fluctuations. D) trade only when they have inside information.
The exchange-rate arrangement that emerged from the Bretton Woods conference is often referred to as the:
a. dollar exchange standard. b. euro exchange standard. c. gold exchange standard. d. silver exchange standard. e. flexible exchange rate standard.
The demand curve for a foreign currency
a. slopes upward b. slopes downward c. is horizontal d. has a slope of 45 degrees e. is vertical
Which of the following is true of profits and losses?
a. Profits direct entrepreneurs toward production of goods that are highly valued relative to their cost, while losses direct them away from wealth-reducing activities. b. Profits indicate that the firm is charging prices that are too high, while losses indicate that the firm needs to raise its prices. c. Profits indicate that the consumer is getting a bad deal, while losses indicate that the consumer values the product highly relative to its cost. d. Profits indicate that the suppliers of resources are underpaid, while losses indicate they are overpaid.