Economists love auctions because
a. They maximize consumer surplus
b. They create efficiency by allotting the item to the highest-value bidder
c. They create efficiency by allotting the item to the lowest value bidder
d. All of the above
b
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Charlie's Chimps is a perfectly competitive firm that produces cuddly chimps for children. The market price of a chimp is $10, and Charlie's produces 100 chimps. The marginal cost of the 100th chimp is $9. Charlie's ________
A) is maximizing its profit B) will maximize its profit if it produces more than 100 chimps C) will maximize its profit if it lowers the price to $9 a chimp D) will maximize its profit if it produces fewer than 100 chimps
Before World War I, most countries belonged to a system of fixed exchange rates in which currencies were tied to which of the following assets?
A) The U.S. dollar B) The British pound C) Silver D) Gold
The primary reason that short-lived shocks can have long-run effects is
A) the nonneutrality of money. B) misperceptions by the public over the actual price level and the expected price level. C) the presence of rational expectations among the public. D) the presence of propagation mechanisms.
Which of the following can be categorized under fiscal policy?
a. Increase in money supply b. Decrease in money supply c. Increase in federal funds rate d. Decrease in reserve requirement e. Increase in tax rates