Consider an antique auction where bidders have independent private values. There are two bidders, each of whom perceives that valuations are uniformly distributed between $100 and $1,000. One of the bidders is Sue, who knows her own valuation is $200. What is Sue's optimal bidding strategy in a first-price, sealed-bid auction?
A. Submit a bid that is less than $150.
B. Submit a bid of $200.
C. Submit a bid of $150.
D. Yell "mine" when the bid reaches $150.
Answer: C
You might also like to view...
A bakery can produce either cakes or cookies. If the price of cookies rises, then
A) the supply curve of cake shifts leftward. B) the supply curve of cake shifts rightward. C) there is a movement downward along the supply curve of cakes. D) there is a movement upward along the supply curve of cakes.
Suppose disposable income increases from $5 trillion to $6 trillion. As a result, consumption expenditure increases from $4 trillion to ________. This result means the MPC equals ______.
A. $4.5 trillion; 4.50 B. $5 trillion; 0.80 C. $4.8 trillion; 0.80 D. $6 trillion; 1.00
Because handling charges are relatively fixed, the interest rate on a loan generally
A. is unrelated to the size of the loan. B. decreases with the size of the loan. C. is constant regardless of the size of the loan. D. increases with the size of the loan.
Would a country with an absolute advantage in the production of all goods and services trade with other countries? Explain
What will be an ideal response?