Question 1

A sealed bid auction is one in which bidders ________.

Accepted Answer

A)  do not know one another's bid 
B)  know one another's bid 
C)  place their bids one after another 
D)  cannot determine the price of the good 
A)  do not know one another's bid 
B)  know one another's bid 
C)  place their bids one after another 
D)  cannot determine the price of the good

Question 2

In a second-price auction,________.

Accepted Answer

A)  bidders submit their bids privately 
B)  bidders place their bids one after another 
C)  bidders know one another's bids 
D)  bidders bid above their willingness to pay 
A)  bidders submit their bids privately 
B)  bidders place their bids one after another 
C)  bidders know one another's bids 
D)  bidders bid above their willingness to pay

Question 3

Who has a higher bargaining power if the demand for the good being transacted is price elastic?

Accepted Answer

The buyer of the good has a higher barga

Question 4

In an English auction,________.

Accepted Answer

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

Question 5

In general,it is common for goods with ________ to be auctioned.

Accepted Answer

A)  low prices 
B)  relatively few buyers 
C)  a large number of buyers 
D)  a large number of sellers 
A)  low prices 
B)  relatively few buyers 
C)  a large number of buyers 
D)  a large number of sellers

Question 6

The winner of a second-price auction pays an amount equal to ________.

Accepted Answer

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

Question 7

In an English auction,the winner pays a price equal to ________.

Accepted Answer

A)  the value of the highest bid 
B)  the value of the lowest bid 
C)  his value for the good 
D)  the value of the second-highest bid 
A)  the value of the highest bid 
B)  the value of the lowest bid 
C)  his value for the good 
D)  the value of the second-highest bid

Question 8

In a Dutch 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

Question 9

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.Alex should place a bid of ________.

Accepted Answer

A)  $187.50 
B)  $200.50 
C)  $225 
D)  $250 
A)  $187.50 
B)  $200.50 
C)  $225 
D)  $250

Question 10

Bidding in a Dutch auction continues until ________.

Accepted Answer

A)  no bidder is willing to bid any higher 
B)  a bidder accepts the price announced by the auctioneer 
C)  a bidder bids above the market price of the good 
D)  a bidder bids below the starting bid 
A)  no bidder is willing to bid any higher 
B)  a bidder accepts the price announced by the auctioneer 
C)  a bidder bids above the market price of the good 
D)  a bidder bids below the starting bid

Question 11

Scenario: Neil and Claire are playing a game. Neil has been given five cookies and has been asked to decide how many he would like to give Claire. Claire has to decide whether to accept Neil's offer or reject it.
-Refer to the scenario above.In equilibrium,Neil will give ________ to Claire if no other factors such as fairness are at work.

Accepted Answer

A)  five cookies 
B)  one cookie 
C)  four cookies 
D)  two cookies 
A)  five cookies 
B)  one cookie 
C)  four cookies 
D)  two cookies

Question 12

One assumption that economists often make while determining the outcome of a Dutch auction is that the bidders are ________.

Accepted Answer

A)  risk neutral 
B)  risk averse 
C)  risk seekers 
D)  rent seekers 
A)  risk neutral 
B)  risk averse 
C)  risk seekers 
D)  rent seekers

Question 13

What are the different types of auctions based on how the price of the item being auctioned is determined?

Accepted Answer

Auctions can be divided into t

Question 14

Many online auctions end when a certain amount of time has gone by without a bid.This causes bidders to place several last-minute bids.This practice is known as ________.

Accepted Answer

A)  sniping 
B)  trading 
C)  bargaining 
D)  signing off 
A)  sniping 
B)  trading 
C)  bargaining 
D)  signing off

Question 15

Esther wants to buy a used car from her neighbor,who quotes a price of $18,000.Esther negotiates with her neighbor and offers him $16,500 for the car.This is an example of ________.

Accepted Answer

A)  bilateral bargaining 
B)  collective bargaining 
C)  arbitration 
D)  speculation 
A)  bilateral bargaining 
B)  collective bargaining 
C)  arbitration 
D)  speculation

Question 16

Which of the following is a difference between a second-price auction and an English auction?

Accepted Answer

A)  The highest bidder wins in a second-price auction, while the second-highest bidder wins in an English auction. 
B)  The second-highest bidder wins in a second-price auction, while the highest bidder wins in an English auction. 
C)  Bids are placed privately in a second-price auction, while bids are placed publicly in an English auction. 
D)  Bids are placed one after another in a second-price auction, while bids are placed simultaneously in an English auction. 
A)  The highest bidder wins in a second-price auction, while the second-highest bidder wins in an English auction. 
B)  The second-highest bidder wins in a second-price auction, while the highest bidder wins in an English auction. 
C)  Bids are placed privately in a second-price auction, while bids are placed publicly in an English auction. 
D)  Bids are placed one after another in a second-price auction, while bids are placed simultaneously in an English auction.

Question 17

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.Which among the following is a possible outcome if the number of bidders falls to 45?

Accepted Answer

A)  There will be no change in the outcome of the auction. 
B)  The optimal bid for Molly will now be $831.11. 
C)  The optimal bid for Molly will now be $745. 
D)  The optimal bid for Molly will now be $845. 
A)  There will be no change in the outcome of the auction. 
B)  The optimal bid for Molly will now be $831.11. 
C)  The optimal bid for Molly will now be $745. 
D)  The optimal bid for Molly will now be $845.

Question 18

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.Maria should submit a bid of ________.

Accepted Answer

A)  $300 
B)  $150 
C)  $200 
D)  $250 
A)  $300 
B)  $150 
C)  $200 
D)  $250

Question 19

If Tom is participating in an English auction,he should ________.

Accepted Answer

A)  bid up to his maximum willingness to pay 
B)  bid above his maximum willingness to pay 
C)  bid below his value for the good being auctioned 
D)  pay a fee to place a bid 
A)  bid up to his maximum willingness to pay 
B)  bid above his maximum willingness to pay 
C)  bid below his value for the good being auctioned 
D)  pay a fee to place a bid

Question 20

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.Rebecca should place a bid of ________.

Accepted Answer

A)  $40,500 
B)  $45,000 
C)  $50,000 
D)  $55,000 
A)  $40,500 
B)  $45,000 
C)  $50,000 
D)  $55,000

A sealed bid auction is one in which bidders ________.

In a second-price auction,________.

Who has a higher bargaining power if the demand for the good being transacted is price elastic?

In an English auction,________.

In general,it is common for goods with ________ to be auctioned.

The winner of a second-price auction pays an amount equal to ________.

In an English auction,the winner pays a price equal to ________.

In a Dutch auction,________ with each bid.

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.Alex should place a bid of ________.

Bidding in a Dutch auction continues until ________.

One assumption that economists often make while determining the outcome of a Dutch auction is that the bidders are ________.

What are the different types of auctions based on how the price of the item being auctioned is determined?

Many online auctions end when a certain amount of time has gone by without a bid.This causes bidders to place several last-minute bids.This practice is known as ________.

Esther wants to buy a used car from her neighbor,who quotes a price of $18,000.Esther negotiates with her neighbor and offers him $16,500 for the car.This is an example of ________.

Which of the following is a difference between a second-price auction and an English auction?

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.Maria should submit a bid of ________.

If Tom is participating in an English auction,he should ________.

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.Rebecca should place a bid of ________.

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

A sealed bid auction is one in which bidders ________.

In a second-price auction,________.

Who has a higher bargaining power if the demand for the good being transacted is price elastic?

In an English auction,________.

In general,it is common for goods with ________ to be auctioned.

The winner of a second-price auction pays an amount equal to ________.

In an English auction,the winner pays a price equal to ________.

In a Dutch auction,________ with each bid.

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.Alex should place a bid of ________.

Bidding in a Dutch auction continues until ________.

One assumption that economists often make while determining the outcome of a Dutch auction is that the bidders are ________.

What are the different types of auctions based on how the price of the item being auctioned is determined?

Many online auctions end when a certain amount of time has gone by without a bid.This causes bidders to place several last-minute bids.This practice is known as ________.

Esther wants to buy a used car from her neighbor,who quotes a price of $18,000.Esther negotiates with her neighbor and offers him $16,500 for the car.This is an example of ________.

Which of the following is a difference between a second-price auction and an English auction?

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.Maria should submit a bid of ________.

If Tom is participating in an English auction,he should ________.

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.Rebecca should place a bid of ________.

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