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 105 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
Gracias!

chjcharjto14

  • Member
  • Posts: 342
Reply 3 on: Yesterday
YES! Correct, THANKS for helping me on my review

« previous next »
 

Did you know?

Malaria was not eliminated in the United States until 1951. The term eliminated means that no new cases arise in a country for 3 years.

Did you know?

Before a vaccine is licensed in the USA, the Food and Drug Administration (FDA) reviews it for safety and effectiveness. The CDC then reviews all studies again, as well as the American Academy of Pediatrics and the American Academy of Family Physicians. Every lot of vaccine is tested before administration to the public, and the FDA regularly inspects vaccine manufacturers' facilities.

Did you know?

According to research, pregnant women tend to eat more if carrying a baby boy. Male fetuses may secrete a chemical that stimulates their mothers to step up her energy intake.

Did you know?

The training of an anesthesiologist typically requires four years of college, 4 years of medical school, 1 year of internship, and 3 years of residency.

Did you know?

All patients with hyperparathyroidism will develop osteoporosis. The parathyroid glands maintain blood calcium within the normal range. All patients with this disease will continue to lose calcium from their bones every day, and there is no way to prevent the development of osteoporosis as a result.

Chest Configurations, Normal Adult, Barrel Chest, Pectus Carinatum, Pectus Excavatum Chest Configurations, Normal Adult, Barrel Chest, Pectus Carinatum, Pectus Excavatum
) A more elaborate motif, the β barrel. This β barrel is a single domain of α-hemolysin ) A more elaborate motif, the β barrel. This β barrel is a single domain of α-hemolysin
Obtained from the deadly nightshade plant Atropa belladona, atropine remains a traditional drug ... Obtained from the deadly nightshade plant Atropa belladona, atropine remains a traditional drug ...
The profit, p(t), made at a fair depends on the price of the ticket, t. The profit is modelled ... The profit, p(t), made at a fair depends on the price of the ticket, t. The profit is modelled ...
Cost = $99.49; Rate of markup based on cost = 32%. Find the markup and selling price. Cost = $99.49; Rate of markup based on cost = 32%. Find the markup and selling price.
Didinium, a barrel-shaped ciliate with tufts of cilia, catching (left) and engulfing (right) Paramec Didinium, a barrel-shaped ciliate with tufts of cilia, catching (left) and engulfing (right) Paramec
Video: Role of the respiratory system - effect of altered ventilation rates

For a complete list of videos, visit our video library