Which of the following statements is true?
A) In cases of auctions and bilateral negotiations, prices tend to approach the competitive equilibrium.
B) Bilateral negotiations allow a single buyer and a single seller to privately negotiate with bids and asks.
C) In auctions, buyers prefer buying from sellers with the highest ask prices.
D) In auctions, sellers prefer selling to buyers with the lowest bid prices.
B
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In which of the following cases would the price elasticity of demand be expected to increase?
A) The number of close substitutes for the good increases. B) The time period under consideration decreases. C) The cost of the good relative to total income decreases. D) The supply of the good increases.
During 1998-2001 the government budget
A) moved deeper into deficit and caused a substantial increase in borrowing from foreign investors. B) moved into surplus but the beneficial effect was largely offset by a drop in household saving. C) was balanced and the inflow of capital from foreign lenders was finally stopped. D) moved into surplus and resulted in large capital outflows from the United States.
A monopoly does not have a supply curve
What will be an ideal response?
A fair coin is flipped. If it lands heads the person receives $1.00. If it lands tails, the person receives $11.00. If the person is not willing to pay $6.00 to take this gamble, they must be
a. risk-neutral. b. risk-averse. c. risk-preferring. d. either risk-neutral or risk-preferring (i.e. not risk averse)