Question

1. In an English? auction, the dominant strategy is to:

A. Bid when the price is higher than your value

B. Bid until the price is above your value

C. Bid until the price is lower than your value

D. Bid when the price is equal to your value

In? equilibrium, the winning bidder will believe the item to have_____(the lowest value/ the highest value/ no value)

and will pay a price equal to the____ (lowest bidder/ highest bidder/ second-highest bidder)

2.Auctions help in price discovery by? ____________.

A.giving consumers the thrill of competing for a? good, since the highest bidder wins.

B.creating increased demand for ordinary? goods, such as the Apple iPad.

C.increasing? supply, especially with Internet? auctions, since goods can be sold faster.

D.finding the appropriate price for unique? goods, such as a? painting, that may not have a? well-established price.

3. The percentage of U.S. adults that have participated in an online auction has____ (stayed the same/ decreased/ increased)over the last decade.

Which of the following goods would be most suitable for an? auction?

A.An original abstract sculpture.

B.A box of Cracker Jack.

C.A Swedish massage.

D.A pair of Nike tennis shoes.

4. Risk neutrality is? ____________.

A.adverse to any risk.

B.neither risk averse nor risk loving.

C.risk loving.

D.risk averse.

Answer 1