This topic contains a solution. Click here to go to the answer
« previous next »

Author Question: Suppose the price of crude oil drops from 150 a barrel to 120 a barrel. The quantity bought remains ... (Read 106 times)

nelaaney

  • Hero Member
  • *****
  • Posts: 560
on: Jul 1, 2018
Suppose the price of crude oil drops from 150 a barrel to 120 a barrel. The quantity bought remains unchanged at 100 barrels. The coefficient of price elasticity of demand in this example would be
 
  A) -0.5.
  B) infinity.
  C) -1.0.
  D) 0.

Question 2

Explain why it is unwise to bid more than your valuation of the good in a sealed bid second-price auction.
 
  What will be an ideal response?


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
Marked as best answer by a Subject Expert

Jsherida

  • Sr. Member
  • ****
  • Posts: 314
Reply #1 on: Jul 1, 2018
Answer to Question 1

D

Answer to Question 2

Assume you have a valuation of the good equal to 50. The price the winning bidder pays is equal to the second highest bid. If you bid 70 and win you will pay less than 50 if the second-highest bid (SHB) is less or equal to 50. In this case you are as well off as bidding 50. If you end up paying more you lose because you are paying more than your valuation of the good. So you are either as well off or worse off than bidding your highest valuation.


nelaaney

  • Member
  • Posts: 560
Reply 2 on: Jul 1, 2018
Great answer, keep it coming :)

abro1885

  • Member
  • Posts: 337
Reply 3 on: Yesterday
Gracias!

« previous next »
 

Did you know?

The first oncogene was discovered in 1970 and was termed SRC (pronounced "SARK").

Did you know?

A cataract is a clouding of the eyes' natural lens. As we age, some clouding of the lens may occur. The first sign of a cataract is usually blurry vision. Although glasses and other visual aids may at first help a person with cataracts, surgery may become inevitable. Cataract surgery is very successful in restoring vision, and it is the most frequently performed surgery in the United States.

Did you know?

The Food and Drug Administration has approved Risperdal, an adult antipsychotic drug, for the symptomatic treatment of irritability in children and adolescents with autism. The approval is the first for the use of a drug to treat behaviors associated with autism in children. These behaviors are included under the general heading of irritability and include aggression, deliberate self-injury, and temper tantrums.

Did you know?

Though methadone is often used to treat dependency on other opioids, the drug itself can be abused. Crushing or snorting methadone can achieve the opiate "rush" desired by addicts. Improper use such as these can lead to a dangerous dependency on methadone. This drug now accounts for nearly one-third of opioid-related deaths.

Did you know?

Between 1999 and 2012, American adults with high total cholesterol decreased from 18.3% to 12.9%

Chest Configurations, Normal Adult, Barrel Chest, Pectus Carinatum, Pectus Excavatum Chest Configurations, Normal Adult, Barrel Chest, Pectus Carinatum, Pectus Excavatum
Skeletal remains from the Sima de los Huesos, Sierra de Atapuerca, Spain. Skeletal remains from the Sima de los Huesos, Sierra de Atapuerca, Spain.
Growth Chart for American Girls From Birth Through Age 3 Growth slows from infancy to toddlerhood b Growth Chart for American Girls From Birth Through Age 3 Growth slows from infancy to toddlerhood b
Examples of Nasal Drops Examples of Nasal Drops
One year ago, Christos bought 1000 units of the Dominion Aggressive Growth Fund at $20.35 per ... One year ago, Christos bought 1000 units of the Dominion Aggressive Growth Fund at $20.35 per ...
Remains of an abscission zone between a leaf petiole and twig of horse chestnut (Aesculus hippocasta Remains of an abscission zone between a leaf petiole and twig of horse chestnut (Aesculus hippocasta
Video: Brief Summary on Photosynthesis - Animation

For a complete list of videos, visit our video library