In common value auctions
a. Every bidder know the value of the object being sold
b. Each bidder makes their own estimate of the value of the good
c. All bidders know the estimates of the others
d. The true value of the item differs across bidders
QUESTION 2In order to assure allocative efficiency:
a. people's marginal rate of substitution must equal the economy's rate of product transformation.
b. people's marginal rate of substitution must equal the firm's rate of technical substitution among inputs.
c. a firm's rate of technical substitution must equal the economy's rate of product transformation.
d. all of the above.
QUESTION 3The antitrust laws regulate all of the following business decisions except ____.
a. collusion
b. mergers
c. monopolistic practices
d. price discrimination
e. wage levels
QUESTION 4In common value auctions
a. Bidder do not know the value of the object being sold
b. Each bidder makes the same estimate of the value of the good
c. All bidders know the estimates of the others
d. The true value of the item differs across bidders
QUESTION 5In an economy consisting of only two goods, corn and cloth, the amount of extra cloth that can be produced efficiently if corn output is reduced by one unit is equal to:
a. the rate of technical substitution for corn divided by the rate of technical substitution for cloth.
b. the rate of technical substitution for cloth divided by the rate of technical substitution for corn.
c. the marginal cost of producing cloth divided by the marginal cost of producing corn.
d. the marginal cost of producing corn divided by the marginal cost of producing cloth.
QUESTION 6Industry A has market shares of 50, 30, and 20 . Industry B has market shares of 45, 40, and 15 . where si is the market shares of the i-th firm in the industry.
a. The Herfindahl index for A is 100.
b. The Herfindahl index for A is 3,800.
c. The Herfindahl index for B is 3,600
d. The Herfindahl index for A is greater than for B.
e. The Herfindahl index is for B is 4,000.
QUESTION 7Bid-rigging is more likely when
a. auctions are larger
b. auctions are infrequent
c. auctions generate different sets of potential bidders
d. the auctioneer is paid a fixed fee rather than on commission
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