A customer at an auction who obtains an antique chair by outbidding several other prospective purchasers
A) may be paying more than the opportunity cost of obtaining the chair.
B) pays a price other than opportunity cost.
C) pays more than its real cost of his bid exceeds the original cost of the chair plus the cost of running the auction.
D) pays the opportunity cost of the last disappointed bidder.
D
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All other things equal, an increase in government spending that is NOT funded by taxes will
A) have an undetermined effect on the current account. B) have no effect on the current account. C) increase the current account deficit. D) decrease the current account deficit.
Which of the following interest rates tends to fluctuate the most?
A) interest rate on corporate bonds B) interest rate on 10-year Treasury bonds C) mortgage interest rate D) federal funds rate
The quality of a product
A) is usually unknown to the seller and the buyer. B) leads to adverse selection. C) creates noise in a market. D) is a hidden characteristic.
The demand for hamburgers is estimated from this theoretical model:
Q = kPaIbAce, where Q = units per day, P = price per unit, A = advertising budget per month by sellers, I = per capita income of consumers, and e = a random error. In a recent study, one researcher estimated the log-linear form of this equation with regression analysis as: log Q = 2.5 - 0.33 log P + 0.15 log I + 0.2 log A. Explain what the coefficients of log P, log I, and log A reveal about this product.