The optimal bid for an individual participating in a first-price, sealed-bid auction with independent private values is to bid:
A. less than the individual's valuation of the item.
B. There is not an optimal bid strategy for all individuals when independent private values exist.
C. exactly the individual's valuation of the item.
D. more than the individual's valuation of the item.
Answer: A
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Which of the following events could result in the consumption function shifting from CF0 to CF2?
A) an increase in disposable income B) an increase in expected future income C) a decrease in wealth D) a decrease in the real interest rate E) a decrease in disposable income The figure above shows two aggregate expenditure lines.
The difference between the ________ for a good and the ________ is called consumer surplus
A) lowest price a consumer is willing to pay; price the consumer actually pays B) highest price a consumer is willing to pay; price the consumer actually pays C) highest price a consumer is willing to pay; lowest price a consumer is willing to pay D) price the consumer actually pays; actual cost to the producer
Environmental problems result when social costs and benefits are different from private costs and benefits
a. True b. False
When the price of a commodity rises, we can expect
a. marginal utility of the last unit purchased will rise. b. marginal utility of the last unit purchased will fall. c. marginal utility of the last unit purchased will be unaffected. d. purchases to rise because of the increased marginal utility.