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 104 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 :)

mohan

  • Member
  • Posts: 362
Reply 3 on: Yesterday
YES! Correct, THANKS for helping me on my review

« previous next »
 

Did you know?

This year, an estimated 1.4 million Americans will have a new or recurrent heart attack.

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?

Opium has influenced much of the world's most popular literature. The following authors were all opium users, of varying degrees: Lewis Carroll, Charles, Dickens, Arthur Conan Doyle, and Oscar Wilde.

Did you know?

In women, pharmacodynamic differences include increased sensitivity to (and increased effectiveness of) beta-blockers, opioids, selective serotonin reuptake inhibitors, and typical antipsychotics.

Did you know?

More than 50% of American adults have oral herpes, which is commonly known as "cold sores" or "fever blisters." The herpes virus can be active on the skin surface without showing any signs or causing any symptoms.

Chest Configurations, Normal Adult, Barrel Chest, Pectus Carinatum, Pectus Excavatum Chest Configurations, Normal Adult, Barrel Chest, Pectus Carinatum, Pectus Excavatum
dew drops spider dew drops spider
U.S. Subsurface Coal Mining: Output, Price, and Output per Worker-Hour, 1949–1994 U.S. Subsurface Coal Mining: Output, Price, and Output per Worker-Hour, 1949–1994
A car wash reduced the price of a basic wash as a promotion and test of the market. With the ... A car wash reduced the price of a basic wash as a promotion and test of the market. With the ...
Your company advertises all prices on the menu board as a final price, including HST of 13%. A ... Your company advertises all prices on the menu board as a final price, including HST of 13%. A ...
Refer to Scenario 3.1. If the price of potato chips is $0.50 and the price of Cola is $4.00, ... Refer to Scenario 3.1. If the price of potato chips is $0.50 and the price of Cola is $4.00, ...
Video: Regulation of GFR: three methods, autoregulation & autoregulation via myogenic mechanism

For a complete list of videos, visit our video library