Auction Information Austin's Auctions conducts online auctions on behalf of clients trying to dispose of liquidated dental laboratory equipment. Some clients want to keep product information about each of the items as guarded as possible so as to
negotiate from a stronger position. Others provide photos, detailed assessments as well as complete maintenance records. Which group of clients receive higher prices and why?
Bidders bid more aggressively with more information about the merchandise than less for two reasons. First, they are more sure that their estimate of the true value of the item is not too far off and so they are less vulnerable to the winner's curse. Second, since most buyers are risk averse, they build into their bids a risk premium when limited information makes their estimates of the true value less precise.
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If both the real interest rate and the nominal interest rate are 3%, then the
A. inflation premium also is 3 percent. B. inflation premium is zero. C. real GDP must exceed the nominal GDP. D. nominal GDP must exceed the real GDP.
Explain the meaning of the word "convergence" in the context of economic growth and standards of living
What will be an ideal response?
As firms leave a monopolistically competitive industry that is sustaining economic losses:
A. the demand curves facing the remaining firms in the industry shift to the left. B. total quantity demanded increases for the industry. C. the demand curves facing the remaining firms in the industry shift to the right. D. the market supply curve shifts to the right.
Indicate whether each of the following situations would shift the supply curve to the left, to the right, or not at all
a. An increase in the number of firms in the market b. An increase in the current price of the product c. A decrease in productivity d. An increase in the expected future price of a product e. A decrease in the price of an input