In the long run, a monopoly's
a. economic profits are zero
b. economic profits are negative
c. economic profits are positive
d. demand is perfectly inelastic
QUESTION 2The winners curse is more often associated with;
a. oral auctions
b. second-price auctions
c. first-price sealed bid auctions
d. common value auctions
QUESTION 3In a monopoly
a. the industry has high barriers to entry
b. the industry has high barriers to exit
c. the industry has high barriers to entry and exit
d. the industry has no barriers to entry or exit
QUESTION 4In common value auctions
a. Every bidder 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 is unknown to bidders
QUESTION 5Monopolies can earn positive profits
a. In the long run only
b. Until they disappear due to new entry
c. In the short run only
d. None of the above
QUESTION 6In common value auctions
a. Every bidder know the value of the object being sold
b. Each bidder makes the same estimate of the value of the good
c. Bidders do not know the estimates of the others
d. The true value of the item differs across bidders
QUESTION 7A small town in West Texas has one gas station. If the price of oil increases, the price of gas that the station charges will most likely
a. increase.
b. decrease.
c. remains the same.
d. may increase or decrease.
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