Consider an auctioneer who is selling an item through an auction. It is known that the 25 risk-neutral bidders have affiliated values that are distributed between $0 and $500 million. Based on this information, the auction type that will maximize expected revenue is:
A. first-price, sealed-bid auction and Dutch auction.
B. English auction.
C. second-price, sealed-bid auction.
D. English auction and second-price, seal-bid auction.
Answer: B
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One reason why banks might increase their reserve-deposit ratio above the minimum level in times of economic uncertainty is that
A. banks are most profitable when new loans are issued. B. banks may have insufficient required reserves. C. banks are initiating quantitative easing D. banks may find only limited lending opportunities that seem sufficiently safe.
Traveler's checks are included in
A) M1 only. B) M2 only. C) both M1 and M2. D) neither M1 nor M2.
In order for the compensating differential associated with a risky job to be negative (so that a risky job pays less than a nonrisky job), it must be that
A. most workers prefer the risky job to the safe job when both wages are equal. B. many workers are willing to work the risky job for free. C. the government mandates that the wages in the two sectors be equal. D. there is great demand for labor in both sectors. E. the number of risky jobs is less than the number of workers who prefer the risky job.
Refer to the figure below. In response to gradually falling inflation, this economy will eventually move from its short-run equilibrium to its long-run equilibrium. Graphically, this would be seen as
A. long-run aggregate supply shifting leftward B. Short-run aggregate supply shifting downward C. Aggregate demand shifting rightward D. Aggregate demand shifting leftward