How do auctions help in price discovery?
What will be an ideal response?
Auctions help in price discovery for goods that do not have well-established prices. For example, for a good that may interest only a few buyers, like a painting, an auction might be a good way of discovering what the appropriate price will be and finding the right buyer. In general, it is common for goods that are unique, with relatively few buyers, to be auctioned.
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Which of the following is NOT a reason people tolerate tariffs and quotas?
A) Ignorance B) Their personal jobs depend on tariffs and quotas. C) Costs may be hidden and hard to quantify. D) Costs of the policy are spread over a large number of people. E) The marginal expenses to fight the protection outweigh the personal marginal costs of the protection.
________ are quotas that lead to a complete elimination of trade
A) Embargoes B) Voluntary export restraints C) Nontariff barriers D) Orderly marketing agreements
We can say that the allocation of resources is efficient if
a. producer surplus is maximized. b. consumer surplus is maximized. c. total surplus is maximized. d. sellers' costs are minimized.
The goal of the consumer is to
a. maximize utility. b. minimize expenses. c. spend more income in the current time period than in the future. d. All of the above are the goals of the consumer.