Which of the following provides the best example of the winner's curse?
a. Sports teams bidding on free agents of uncertain abilities.
b. Loyal consumers buying six packs of a popular soft drink at the grocery store.
c. Employers paying skilled and experienced workers with considerable job tenure a premium wage.
d. An investor estimating the value of his fixed deposit.
a
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According to the theory of efficiency wages, firms operate more efficiently if wages are above the equilibrium level
a. True b. False Indicate whether the statement is true or false
Like monopolists, oligopolists are aware that an increase in the quantity of output always
a. reduces the price of their product. b. reduces their profit. c. reduces their revenue. d. reduces productivity.
There is a
a. short-run tradeoff between inflation and unemployment. b. short-run tradeoff between an increase in the money supply and inflation. c. long-run tradeoff between inflation and unemployment. d. long-run tradeoff between an increase in the money supply and inflation.
The major purpose of the Federal Reserve buying government securities in open market operations is to:
a. Increase interest rates b. Raise money for government spending c. Allow banks to increase their lending d. Reduce the excess reserves of banks