Consider an antique auction where bidders have independent private values. There are two bidders, each of whom perceives that valuations are uniformly distributed between $100 and $1,000. One of the bidders is Sue, who knows her own valuation is $200. What is Sue's optimal bidding strategy in a Dutch auction?
A. Yell "mine" when the bid reaches $150.
B. Submit a bid that is less than $150.
C. Submit a bid of $150.
D. Submit a bid of $200.
Answer: A
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The following graph depicts demand. 
The price elasticity of demand at point A is:
A. 2/5. B. 8/5. C. 5/8. D. 5/2.
When there is an expansionary gap, inflation will ________, in response to which the Federal Reserve will ________ real interest rates, and output will ________.
A. decline; lower; expand B. increase; raise; decline C. decline; lower; decline D. decline; raise; decline
An economy's ________ during a recession
A) labor supply curve shifts to the right B) labor demand curve shifts to the right C) labor supply curve shifts to the left D) labor demand curve shifts to the left
Within a fixed exchange rate system, the effect of an expansionary fiscal policy action on the balance of payments will be to
a. worsen the balance on the capital account but improve the trade balance. b. worsen the trade balance but improve the balance on the capital account. c. worsen both the trade balance and the balance on the capital account. d. improve both the trade balance and the balance on the capital account.