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 61 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 :)

pangili4

  • Member
  • Posts: 346
Reply 3 on: Yesterday
Excellent

« previous next »
 

Did you know?

In the United States, congenital cytomegalovirus causes one child to become disabled almost every hour. CMV is the leading preventable viral cause of development disability in newborns. These disabilities include hearing or vision loss, and cerebral palsy.

Did you know?

The heart is located in the center of the chest, with part of it tipped slightly so that it taps against the left side of the chest.

Did you know?

Liver spots have nothing whatsoever to do with the liver. They are a type of freckles commonly seen in older adults who have been out in the sun without sufficient sunscreen.

Did you know?

The calories found in one piece of cherry cheesecake could light a 60-watt light bulb for 1.5 hours.

Did you know?

Alzheimer's disease affects only about 10% of people older than 65 years of age. Most forms of decreased mental function and dementia are caused by disuse (letting the mind get lazy).

A diversity of species live within the soils, the ecology of which remains to be explored. A diversity of species live within the soils, the ecology of which remains to be explored.
The site of Gladysvale in South Africa is excavated for Australopithecus remains. The site of Gladysvale in South Africa is excavated for Australopithecus remains.
A dose-response curve describes the relationship between the quantity of the chemical entering the ... A dose-response curve describes the relationship between the quantity of the chemical entering the ...
Head with Remains of Painted Decoration Head with Remains of Painted Decoration
Suppose the market supply curve is p = 5Q. If price increases from 10 to 15, the change in ... Suppose the market supply curve is p = 5Q. If price increases from 10 to 15, the change in ...
Sonal bought a coat for $198.88, which included 8% PST and 5% GST. What was the selling price ... Sonal bought a coat for $198.88, which included 8% PST and 5% GST. What was the selling price ...
Video: Biological organic compounds

For a complete list of videos, visit our video library