A second-price auction
a. is also called a Vickrey auction
b. is where bidders submit increasing bids until all but one remains
c. is where the sole remaining bidder wins and pays his winning bid
d. all of the above
QUESTION 2A deadweight loss of consumer and/or producer surplus occurs when:
a. producers fail to maximize profits.
b. mutually beneficial transactions cannot be completed.
c. consumers do not maximize their utility.
d. the price of inputs increases.
QUESTION 3Appendix: A Dutch auction implies all of the following except
a. more than one unit sale available
b. higher prices later in the auction
c. identical expected seller revenue for common value items
d. greater expected seller revenue in estate sales with risk-averse bidders
QUESTION 4An oral auction
a. is also called a Vickrey auction
b. is conducted by bidders submitting a single sealed bid
c. is where the sole remaining bidder wins and pays his winning bid
d. all of the above
QUESTION 5In a competitive market, an efficient allocation of resources is characterized by:
a. a price greater than the marginal cost of production.
b. the possibility of further mutually beneficial transactions.
c. the largest possible sum of consumer and producer surplus.
d. a value of consumer surplus equal to that of producer surplus.
QUESTION 6Appendix: The principal advantage of an open bidding system for allocating telecommunications spectrum licenses was
a. the pooling of asymmetric information by the bidders
b. the reconfiguring of cell phone license areas
c. the substitute value of adjacent service areas
d. reduced cost
QUESTION 7A second-price auction
a. is also called an English auction
b. is where the highest bidder wins and pays the amount of the next highest bid
c. is where the sole remaining bidder wins and pays his winning bid
d. all of the above
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