Question 1

In a Dutch auction,________.

Accepted Answer

A)  the bidders begin the bidding process with a low starting bid 
B)  the auctioneer begins the bidding process with a low starting bid 
C)  the auctioneer begins the bidding process with a high starting bid 
D)  the bidders decide the starting bid 
A)  the bidders begin the bidding process with a low starting bid 
B)  the auctioneer begins the bidding process with a low starting bid 
C)  the auctioneer begins the bidding process with a high starting bid 
D)  the bidders decide the starting bid C

Question 2

In an English auction,________ with each bid.

Accepted Answer

A)  the price of the good increases 
B)  the price of the good decreases 
C)  the quantity of the good being offered increases 
D)  the quantity of the good being offered decreases 
A)  the price of the good increases 
B)  the price of the good decreases 
C)  the quantity of the good being offered increases 
D)  the quantity of the good being offered decreases A

Question 3

Scenario: Four friends-Tom, Bill, Jeff, and Roger-are participating in an English auction. Tom values the good being auctioned at $500, Bill values it at $210, Jeff values it at $350, and Roger values it at $625.
-Refer to the scenario above.If they are the only bidders in the auction and each bidder bids up to his value for the good,the winner will earn a surplus of ________.

Accepted Answer

A)  $500 
B)  $625 
C)  $125 
D)  $150 
A)  $500 
B)  $625 
C)  $125 
D)  $150 C

Question 4

Scenario: Consider the following situation. Molly is one among the sixty-one bidders who take part in a first-price auction for vintage furniture. Molly places a value of $850, the highest value, for a vintage dressing table that comes up for auction. Joseph has the second-highest willingness to pay of $750.
-Refer to the scenario above.If the number of bidders goes up to 65,Molly's optimal bid for the product would be ________,and her consumer surplus would be ________.

Accepted Answer

A)  $836.92; $13.08 
B)  $831.11; $18.89 
C)  $765.50; $25 
D)  $750; $28.50 
A)  $836.92; $13.08 
B)  $831.11; $18.89 
C)  $765.50; $25 
D)  $750; $28.50

Question 5

What is the difference between the optimizing strategies used in an English auction and a Dutch auction?

Accepted Answer

In an English auction,it is an optimal s

Question 6

Scenario: Four friends-Tom, Bill, Jeff, and Roger-are participating in an English auction. Tom values the good being auctioned at $500, Bill values it at $210, Jeff values it at $350, and Roger values it at $625.
-Refer to the scenario above.Suppose there are several other bidders in the auction.Roger will win the auction only if ________.

Accepted Answer

A)  all the other bidders bid above $625 
B)  all the other bidders bid below $625 
C)  all the other bidders are risk lovers 
D)  all the bidders are risk averse 
A)  all the other bidders bid above $625 
B)  all the other bidders bid below $625 
C)  all the other bidders are risk lovers 
D)  all the bidders are risk averse

Question 7

An English auction is usually a(n)________ auction.

Accepted Answer

A)  first-price 
B)  second-price 
C)  penny 
D)  open-outcry 
A)  first-price 
B)  second-price 
C)  penny 
D)  open-outcry

Question 8

Harry and his wife are looking for a new house.However,they cannot decide where to buy the house.Harry wants to live in Santa Cruz,while his wife wants to live in Ontario.If Harry values living in Santa Cruz at $10,000 and his wife values living in Ontario at $15,000,where are they likely to buy a house?

Accepted Answer

Because Harry's wife values living in On

Question 9

Mr.Smith won a laptop in an online auction in which bidders could one another's bids,and the price increased with every new bid.
a)If Mr.Smith values the laptop at $400,determine his dominant strategy.
b)Will there be a change in his optimal bidding strategy if there is an increase in the number of bidders?

Accepted Answer

a)Mr.Smith is participating in an Englis

Question 10

The winner in a first-price auction pays an amount equal to ________.

Accepted Answer

A)  his bid 
B)  the second-highest bid 
C)  half of his bid 
D)  the lowest bid 
A)  his bid 
B)  the second-highest bid 
C)  half of his bid 
D)  the lowest bid

Question 11

________ is the process of determining the terms of exchange by individual negotiations between a buyer and a seller.

Accepted Answer

A)  Backward induction 
B)  Bilateral bargaining 
C)  Arbitration 
D)  Collective bargaining 
A)  Backward induction 
B)  Bilateral bargaining 
C)  Arbitration 
D)  Collective bargaining

Question 12

The larger the number of bidders in a Dutch auction,________.

Accepted Answer

A)  the lower is the maximum willingness to pay of each bidder 
B)  the smaller is the consumer surplus earned by the winner 
C)  the larger is the quantity offered by the auctioneer for auction 
D)  the lower is the value of the starting bid 
A)  the lower is the maximum willingness to pay of each bidder 
B)  the smaller is the consumer surplus earned by the winner 
C)  the larger is the quantity offered by the auctioneer for auction 
D)  the lower is the value of the starting bid

Question 13

Scenario: Rebecca is participating in a Dutch auction for an antique necklace. The total number of bidders in this auction is ten. Rebecca values the necklace at $45,000, while all the other bidders value it below $45,000.
-Refer to the scenario above.If the best response of one bidder is to place a bid of $9,000,what is her maximum willingness to pay for the necklace?

Accepted Answer

A)  $10,000 
B)  $9,000 
C)  $4,500 
D)  $18,000 
A)  $10,000 
B)  $9,000 
C)  $4,500 
D)  $18,000

Question 14

Phillip is going for a job interview.He will have a higher bargaining power if ________.

Accepted Answer

A)  he is the only applicant 
B)  there are several applicants 
C)  no other company has a job opening 
D)  he is a college freshman 
A)  he is the only applicant 
B)  there are several applicants 
C)  no other company has a job opening 
D)  he is a college freshman

Question 15

Scenario: An ancient painting is being auctioned off in an English auction. The following table shows the maximum willingness to pay of each bidder.
  
-Refer to the scenario above.If the starting bid is $250,________ will win the auction and will have to pay ________ for the painting.

Accepted Answer

A)  Bob; $250 
B)  James; $400 
C)  Rachel; $450 
D)  Joe; $400 
A)  Bob; $250 
B)  James; $400 
C)  Rachel; $450 
D)  Joe; $400

Question 16

Scenario: An ancient painting is being auctioned off in an English auction. The following table shows the maximum willingness to pay of each bidder.
  
-Refer to the scenario above.Which of the following statements will hold true if the starting bid is $300?

Accepted Answer

A)  Everyone except Bob will take part in the auction. 
B)  Everyone will take part in the auction. 
C)  Only Bob will take part in the auction. 
D)  Everyone except Joe will take part in the auction. 
A)  Everyone except Bob will take part in the auction. 
B)  Everyone will take part in the auction. 
C)  Only Bob will take part in the auction. 
D)  Everyone except Joe will take part in the auction.

Question 17

Scenario: Alice is participating in a Dutch auction for a painting. There are five other bidders, and Alice values the painting at $30,000.
-Beth is participating in a Dutch auction.Bidding starts at $500,and her maximum willingness to pay is $400.The total number of bidders participating in the auction is four.Her optimal bid strategy is to buy when the price reaches ________.

Accepted Answer

A)  $320 
B)  $300 
C)  $375 
D)  $125 
A)  $320 
B)  $300 
C)  $375 
D)  $125

Question 18

In an English auction,the ________ bidder wins.

Accepted Answer

A)  highest 
B)  second-highest 
C)  first 
D)  second 
A)  highest 
B)  second-highest 
C)  first 
D)  second

Question 19

Scenario: John, Jacob, Alex, and Maria participate in a first-price auction for an iPod. John values the iPod at $400, Jacob values it at $300, Alex values it at $250, and Maria values it at $200.
-Refer to the scenario above.Jacob should submit a bid of ________.

Accepted Answer

A)  $500 
B)  $400 
C)  $300 
D)  $225 
A)  $500 
B)  $400 
C)  $300 
D)  $225

Question 20

In a second-price auction,the ________ bidder wins the item.

Accepted Answer

A)  second-highest 
B)  highest 
C)  first 
D)  lowest 
A)  second-highest 
B)  highest 
C)  first 
D)  lowest

In a Dutch auction,________.

In an English auction,________ with each bid.

What is the difference between the optimizing strategies used in an English auction and a Dutch auction?

An English auction is usually a(n)________ auction.

The winner in a first-price auction pays an amount equal to ________.

________ is the process of determining the terms of exchange by individual negotiations between a buyer and a seller.

The larger the number of bidders in a Dutch auction,________.

Phillip is going for a job interview.He will have a higher bargaining power if ________.

Scenario: An ancient painting is being auctioned off in an English auction. The following table shows the maximum willingness to pay of each bidder. -Refer to the scenario above.If the starting bid is $250, will win the auction and will have to pay for the painting.

Scenario: An ancient painting is being auctioned off in an English auction. The following table shows the maximum willingness to pay of each bidder. -Refer to the scenario above.Which of the following statements will hold true if the starting bid is $300?

In an English auction,the ________ bidder wins.

Scenario: John, Jacob, Alex, and Maria participate in a first-price auction for an iPod. John values the iPod at $400, Jacob values it at $300, Alex values it at $250, and Maria values it at $200. -Refer to the scenario above.Jacob should submit a bid of ________.

In a second-price auction,the ________ bidder wins the item.

The Principles and Practice of Economics

Economic Methods and Economic Questions

Optimization: Doing the Best You Can

Demand, supply, and Equilibrium

Consumers and Incentives

Sellers and Incentives

Perfect Competition and the Invisible Hand

Trade

Externalities and Public Goods

The Government in the Economy: Taxation and Regulation

Markets for Factors of Production

Monopoly

Game Theory and Strategic Play

Oligopoly and Monopolistic Competition

Trade-Offs Involving Time and Risk

The Economics of Information

Social Economics

Filters

Exam 17: Auctions and Bargaining

In a Dutch auction,________.

In an English auction,________ with each bid.

What is the difference between the optimizing strategies used in an English auction and a Dutch auction?

An English auction is usually a(n)________ auction.

The winner in a first-price auction pays an amount equal to ________.

________ is the process of determining the terms of exchange by individual negotiations between a buyer and a seller.

The larger the number of bidders in a Dutch auction,________.

Phillip is going for a job interview.He will have a higher bargaining power if ________.

Scenario: An ancient painting is being auctioned off in an English auction. The following table shows the maximum willingness to pay of each bidder. -Refer to the scenario above.If the starting bid is $250,________ will win the auction and will have to pay ________ for the painting.

Scenario: An ancient painting is being auctioned off in an English auction. The following table shows the maximum willingness to pay of each bidder. -Refer to the scenario above.Which of the following statements will hold true if the starting bid is $300?

In an English auction,the ________ bidder wins.

Scenario: John, Jacob, Alex, and Maria participate in a first-price auction for an iPod. John values the iPod at $400, Jacob values it at $300, Alex values it at $250, and Maria values it at $200. -Refer to the scenario above.Jacob should submit a bid of ________.

In a second-price auction,the ________ bidder wins the item.

The Principles and Practice of Economics

Economic Methods and Economic Questions

Optimization: Doing the Best You Can

Demand, supply, and Equilibrium

Consumers and Incentives

Sellers and Incentives

Perfect Competition and the Invisible Hand

Trade

Externalities and Public Goods

The Government in the Economy: Taxation and Regulation

Markets for Factors of Production

Monopoly

Game Theory and Strategic Play

Oligopoly and Monopolistic Competition

Trade-Offs Involving Time and Risk

The Economics of Information

Social Economics

Filters

Scenario: An ancient painting is being auctioned off in an English auction. The following table shows the maximum willingness to pay of each bidder. -Refer to the scenario above.If the starting bid is $250, will win the auction and will have to pay for the painting.