A situation in which a bidder over-values an auction item and is worse off because their bid is too high is known as the:
A) Ellsberg Paradox.
B) winner's curse.
C) Arrow Impossibility Theorem.
D) curse of the commons.
B
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Use the following list of factors that are related to the aggregate demand curve to answer the next question.1) Real-Balances Effect2) Household Expectations3) Interest-Rate Effect4) Personal Income Tax Rates5) Profit Expectations6) National Income Abroad7) Government Spending8) Foreign Purchases Effect9) Exchange Rates10) Degree of Excess CapacityWhich of the above factors best explain the downward slope of aggregate demand curve?
A. 7, 9, and 10 B. 4, 6, and 7 C. 2, 4, and 6 D. 1, 3, and 8
Which of the following is used to argue that the self-interest of public policymakers will often lead to actions that are inconsistent with the preferences of the voters they represent?
A) the median voter theorem B) the voting paradox C) rent seeking D) transitivity of voters' preferences
Consumers know that some fraction, p, of all new cars produced and sold in the market are defective. The defective ones cannot be identified except by those who own them. Cars do not depreciate with use. Consumers are risk-neutral and value nondefective cars at $8,000. If new cars sell for $6,000 and used cars sell for $2,000, then what is the fraction p?
A. 0.33 B. 0.5 C. 0.25 D. 0.67
Pat can either drive to work, which takes half an hour and uses $1.50 worth of gas, or take the bus, which takes an hour and costs $1.00. How should Pat get to work?
A. Pat should take the bus if saving half an hour is worth $0.50 or more. B. Pat should drive if saving half an hour is worth $0.50 or more. C. Pat should drive because it saves half an hour relative to taking the bus. D. Pat should take the bus because it costs $0.50 less than driving.