Appendix: An incentive-compatible mechanism for revealing true willingness to pay in a private value auction is
a. impossible
b. a Dutch auction
c. a second-highest sealed bid auction
d. a sequential auction with open bidding
e. a discriminatory price all-or-nothing auction.
c
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Explain the three desirable features of a good monetary policy instrument.
What will be an ideal response?
Under the liquidity premium theory, if investors expect short-term interest rates to remain constant, the yield curve should:
A. be flat. B. have a negative slope. C. have a positive slope. D. have an increasing slope.
Assume that price is greater than average variable cost. If a perfectly competitive seller is producing at an output where price is $11 and the marginal cost is $14.54, then to maximize profits the firm should
A) continue producing at the current output. B) produce a larger level of output. C) produce a smaller level of output. D) There is not enough information given to answer the question.
If a firm's profit is $0, then it must be true that
A. TFC is zero. B. TR equals TFC. C. TR equals TVC. D. TR equals TC.