When each bidder in an auction knows what the item is worth to that bidder, but does not know the valuations of other bidders, the auction exhibits:
A. partially private values.
B. private values.
C. perfect information.
D. common values.
Answer: B
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When the Fed raises the required reserve ratio, it:
a. lowers the cost of borrowing from the Fed, encouraging banks to make loans to the general public. b. raises the cost of borrowing from the Fed, discouraging banks from making loans to the general public. c. increases the amount of excess reserves that banks hold, encouraging them to make loans to he general public. d. increases the amount of excess reserves that banks hold, discouraging them from making loans to the general public. e. decreases the amount of excess reserves that banks hold, discouraging them from making loans to the general public.
When free international trade takes place, in accordance with a country's comparative advantage,
a. producers in export industries are likely to favor it because they sell a larger quantity at identical prices b. producers in export industries are likely to oppose it because they sell a larger quantity, which lowers prices in accordance with the laws of supply and demand c. producers in import industries are likely to favor it because they sell a larger quantity at only slightly depressed prices d. export industry workers are likely to favor it, import industry workers are likely to hate it e. consumers are likely to be of two minds: they hate the more expensive import goods, but they love the cheaper export goods
The Federal Reserve has been quite consistently successful in keeping the inflation rate low over its entire history
a. True b. False
Suppose that a business incurred implicit costs of $500,000 and explicit costs of $5 million in a specific year. If the firm sold 100,000 units of its output at $50 per unit, its accounting:
A. profits were $100,000 and its economic profits were zero. B. profits were zero and its economic losses were $500,000. C. losses were $500,000 and its economic losses were zero. D. profits were $500,000 and its economic profits were $1 million.