Consider a laboratory experiment in which subjects are given the chance to bid on a $20 bill. The initial bid must be at least 50 cents, and each succeeding bid must exceed the previous bid by 50 cents. The rules of the auction specify that when the bidding ceases, the $20 bill will be given to the top bidder, and both the highest bidder and the second highest bidder must pay their final bid. In experimental settings such as this, researchers have found that:
A. no one wants to participate in the auction.
B. the top bid is exactly $20
C. the sum of the top two bids typically exceeds $20
D. the sum of the top two bids is typically less than $20.
Answer: C
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In economics, choices must be made because we live in a world of
A) unemployment. B) greed. C) scarcity. D) unlimited resources.
The firm learns that the probability of launch estimated for the voice activated software was too optimistic and instead is actually 65%. Is it still worth for the company to develop the simplified software?
a. No, because the expected return is lower b. No, because the expected return is higher c. Yes, because the expected return is higher d. Yes, because the expected return is lower
Government transfer payments include all of the following except
a. retirement benefits b. paid vacations c. veteran benefits d. disability payments e. subsidies to farmers
Market economies produce outcomes that are
A. virtually ideal in all respects. B. inferior to most other systems. C. far from ideal, in some respects. D. virtually indistinguishable from command economies.