This topic contains a solution. Click here to go to the answer

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
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
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

 

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.

For a complete list of videos, visit our video library