U2. Suppose that three risk-neutral bidders are interested in purchasing a Princess Beanie Baby. The bidders (numbered 1 through 3) have valua- tions of $12, $14, and $16, respectively. The bidders will compete in auc- tions as described in parts (a) through (d); in each case, bids can be made in $1 increments at any value from $5 to $25. (a) Which bidder wins an open-outcry English auction? What are the final price paid and the profit to the winning bidder? (b) Which bidder wins a second-price, sealed-bid auction? What are the final price paid and the profit to the winning bidder? Contrast your answer here with that for part (a). What is the cause of the difference in profits in these two cases? (c) In a sealed-bid, first-price auction, all the bidders will bid a positive amount (at least $1) less than their true valuations. What is the likely Med
Q: Consider an individual who decides to allocate time between different activities. For simplicity…
A: The work-leisure model represents the trade-offs between working hours and leisure hours. Given…
Q: Using data from a random sample of 1000 working adults, we obtain the following estimated regression…
A: Given information Multiple regression equation…
Q: Find the nominal annual rate of interest compounded quarterly that is equivalent to 11.6% compounded…
A: Formula between nominal rate of interest and effective rate of interest: i=1+rmlm-1 Here i is the…
Q: When is the definition and enforcement of property rights especially difficult? Group of answer…
A: Property Rights is defined as the legal rights to own and use resources in an economy. The resources…
Q: By bargaining for higher wages, unions will likely reduce the quantity of labor demanded by…
A: Labor unions are the associations formed by workers of an industry to get their rights. These…
Q: EXERCISE 3 If Joe decides to allocate his entire weekly allowance between energy drinks and coffee,…
A: Budget Constraint is a function of good's prices and the income level . Budget Constraint : Income…
Q: Gilberto's reservation prices for tubs of hummus are given below. Q (Tubs) 1 2 3 4 5 Reservation…
A: The maximization of utility is at the point where the marginal utility per dollar (i.e. marginal…
Q: 4-10 The operations manager of a musical instrument distributor feels that demand for a particular…
A: Regression analysis gets utilized to understand how two or more variables are related. It also gets…
Q: What might happen to the "real wage" paid to employees who earn the minimum wage if firms raise…
A: The nominal wage is the actual wage in terms of money employees received. The real wage is the…
Q: Price $100 $90 $80 $70 $60 $ 50 Quantity 1 2 945 WN 3 6 Total Cost $150 $180 $220 $300 $400 $550 at…
A: Monopolist: A monopolist is a single seller in the market and hence he faces the downward sloping…
Q: Problem 1. Find the maturity value of the following simple interest investments. (i) $3125 invested…
A: Maturity value is the amount that will be received if you invest a sum of money for a certain time…
Q: 1. A monopolist is a of the product it sells. a seller that has the ability to control, to some…
A: A monopoly seller means one seller where mono means one and poly means to sell. So a monopolist is a…
Q: A monopolistic competitor wishing to maximize profit will select a quantity where marginal cost…
A: In a monopolistic competition , There are free entry and exit. They serve slightly different types…
Q: Advantages and disadvantages of ASEAN Free Trade Area (AFTA)
A: ASEAN Free Trade Area refers to the trade bloc agreement supporting the local trade of all ASEAN…
Q: The figure to the right shows the market demand for electricity and the average total cost and…
A: Economic efficiency refers to a situation in which all resources are properly managed to best…
Q: Your business buys a delivery van for $28,000. You figure the van will be useful for 5 years and…
A: Given Cost of delivery van =$28,000 This van is useful for 5 years and its value at the end of 5…
Q: A competitive firm produces a product using the function f(x1,x2)=8x1/21x1/22f(x1,x2)=8x11/2x21/2.…
A: f(x1,x2) = 8x1x2p1=$2.50p2=$4Sub to: C = 2.5x1+4x2
Q: Which of the following are considered money? (Check all that apply): A. Coins and paper money…
A: 1. Medium of exchange: Due to its widespread acceptance, money serves as a crucial medium of…
Q: Ha-Joon Chang argues that free trade in the 1800's: was responsible for the rapid rise of capitalism…
A: Free trade refers to trade between countries where there are no trade barriers. That is, there are…
Q: 4-22 The following data give the selling price, square footage, number of bedrooms, and age of…
A: In statistics the regression equation will be used to determine out the relationship, if any, exists…
Q: Recently the Fed has implemented tight money policy in an effort to reduce inflation. Graphically…
A: Monetary policy refers to the use of different tools to adjust the money supply in the economy .…
Q: Consider the following information: Q = 16 L + 42 K PL=26, PK=10, P=41 and C=5020 What is the profit…
A: The decrease in units of one input for an additional units of other input is measured by…
Q: What are the main characteristic/assumption of monopoly market structure?
A: Monopoly: Monopoly means "alone to sell". In a market with a monopoly, there is only one seller of a…
Q: What is meant by the tax subsidy of employer-paid health insurance? Explain why the subsidy very…
A: Tax subsidy is defined as a reduction on the tax burden which is provided to an individual or a firm…
Q: why is BOP important for MNE
A: The balance of payments (BoP) is a statement of all transactions in trade, and investment between…
Q: Compute marginal utilities and marginal rate of substitution for each of the utility functions given…
A: Marginal utility is the utility gained by consuming one more unit of a good. It is calculated as…
Q: 12. Over the last decade, robotic-drone a research and development company has researched in new…
A: Given information $90M sales annually with 20% probability. $76M sales annually with 45%…
Q: In a perfectly competitive labour market, if the wage rate is less than the value of marginal…
A: A perfectly competitive firm in the labor market hires the labor at the following point. MP = (W /…
Q: Two individuals (A and B) live on an island where they consume coconuts (good x) and bananas (good…
A: Price of coconuts = p Price of banana = 1 Price ratio = p For Individual A - Utility function :…
Q: pmilk under quota CMarginal Which of the following reflects the Dead Weight Loss stemming from the…
A: Quata is the fixed amount of quantity which is fixed by the government. Dead weight loss is the…
Q: Desk purchased July 12 for $2,000; 8-year useful life; $600 salvage value. Calculate MACRS…
A: The modified accelerated cost recovery system refers to the depreciation system used for tax…
Q: Paul, Ringo, and George have a business where they visit people's homes to mow lawns and wash cars.…
A: Opportunity cost is the cost of producing one good in terms of other. Opportunity cost shows the…
Q: Suppose you want to estimate the following model s Bat Biệt By 4 th where z is likely to be…
A: In the case of cross-sectional data, various parameters are observed at a particular point in time.…
Q: Consider the demand curve for hair cuts is given by Q=100−2P and the market equilibrium price equals…
A: The consumer surplus refers to the difference between what a consumer is willing to pay and what…
Q: The balance sheet of Nationa Bank is shown below (assume a legal reserve ratio of 10%): Assets…
A: To find the amount of money that a bank can create we need to find the money multiplier which is a…
Q: 4-30 In 2012, the total payroll for the New York Yankees was almost $200 million, while the total…
A: Payroll is the sum of all the benefits that a company is required to deliver to its workers on a…
Q: Economic efficiency in a market requires that the market be allocatively and technically efficient.…
A: The change in utility from consuming an additional unit of a commodity is called marginal utility.…
Q: A baseball team plays in a stadium that holds 54000 spectators. With the ticket price at $8 the…
A:
Q: When Great Britain voted to leave the eurozone, the pound depreciated 17% against the dollar. It…
A: As mentioned in the very question that Dollar is considered safer than the Euro which means surely…
Q: Graph the appropriate function(s) in each problem, and use the graphing calculator and its features…
A: Given Cost function: C(x)=0.1x2+35x+15,000 .....(1) Revenue function: R(x)=-0.9x2+385x…
Q: based on your answers from the previous question in assuming that the marginal revenue curve is a…
A: MR is the marginal revenue. Marginal revenue is the change in total revenue due to an additional…
Q: Which is not a Final Use Component of the Use Table: O a. Household final consumption expenditure O…
A: The input-output table represents the process of the production and uses of the goods and services.…
Q: 2) Define and provide an example of the opportunity cost (Minimum 5 lines)
A: Since you have asked multiple question, we will solve the first question for you. If you want any…
Q: Suppose the residents of country P consume only peaches and pecans. The table below shows the prices…
A: The residents of country P consume only peaches and pecans. The market basket consists of 10…
Q: What would happen when price ceiling is below the market price A) supply surplus B) demand shortage…
A: The price ceiling is a kind of price control and the highest price that could be charged for any…
Q: In a monopoly the market price is Question 6 options: a) equal to marginal revenue b)…
A: In a monopoly , The firm will produce where MR = MC MR is the marginal revenue MC is the marginal…
Q: If government mandates P = ATC, are profits positive, negative, or zero? Compared to monopoly…
A: Monopoly is a condotion where there only one seller in the market. In conventional economic…
Q: This package of sliced cheese costs $2.97. How much would a package with 18 slices cost at the same…
A: Price is the amount of money needed to be paid for acquiring a given product or the amount of money…
Q: As the manager of Smith Construction, you need to make a decision on the number of homes to build in…
A: In economics, profit maximization happens when there is a maximum gap between TR and the TC. In…
Q: P3 PA Ps QA QB Qс What would be the Equilibrium Price and the Equilibrium Quantity if the Demand for…
A: Equilibrium is where demand curve intersects supply curve The increase in demand means the…
Trending now
This is a popular solution!
Step by step
Solved in 3 steps
- The Federal Communications Commission (FCC) has hired you as a consultant to design an auction to sell wireless spectrum rights. The FCC indicates that its goal of using auctions to sell these spectrum rights is to generate revenue. Since most bidders are large telecommunications companies, you rationally surmise that all participants in the auction are risk neutral. Which auction type—first-price, second-price, English, or Dutch—would you recommend if all bidders value spectrum rights identically but have different estimates of the true underlying value of spectrum rights?The Federal Communications Commission (FCC) has hired you as a consultant to design an auction to sell wireless spectrum rights. The FCC indicates that its goal of using auctions to sell these spectrum rights is to generate revenue. Since most bidders are large telecommunications companies, you rationally surmise that all participants in the auction are risk neutral. Which auction type—first-price, second-price, English, or Dutch—would you recommend if all bidders value spectrum rights identically but have different estimates of the true underlying value of spectrum rights? Kindly give a brief one-page description as part of the assignment.The mixed stratergy nash equalibrium consists of : the probability of firm A selecting October is 0.692 and probability of firm A selecting December is 0.309. The probability of firm B selecting October is 0.5 and probability of firm selecting December is 0.5. In the equilibrium you calculated above, what is the probability that both consoles are released in October? In December? What are the expected payoffs of firm A and of firm B in equilibrium?
- Nn3 Suppose an incumbent monopoly firm currently earns a profit of $50,000 per period. A potential entrant could enter and make a profit of $15,000 per period while also lowering the incumbent’s profit to $20,000 per period. The monopoly firm could seek to engage in predatory pricing, which would lead to both firms earning a loss of $5,000 per period. (a) Is there a Nash Equilibrium in this game? If so, what is it? (b) Discuss how this game might play out in the real world?The FCC has hired you as a consultant to design an auction to sell wireless spectrum rights. The FCC indicates that its goal of using auctions to sell these spectrum rights is to generate revenue. Since most bidders are large telecommunications companies, you rationally surmise that all participants in the auction are risk neutral. Which auction type—first-price, second-price, English, or Dutch—would you recommend if all bidders value spectrum rights identically but have different estimates of the true underlying value of spectrum rights? ExplainCameron and Luke are playing a game called ”Race to 10”. Cameron goes first, and the players take turns choosing either 1 or 2. In each turn, they add the new number to a running total. The player who brings the total to exactly 10 wins the game. a) If both Cameron and Luke play optimally, who will win the game? Does the game have a first-mover advantage or a second-mover advantage? b) Suppose the game is modified to ”Race to 11” (i.e, the player who reaches 11 first wins). Who will win the game if both players play their optimal strategies? What if the game is ”Race to 12”? Does the result change? c) Consider the general version of the game called ”Race to n,” where n is a positive integer greater than 0. What are the conditions on n such that the game has a first mover advantage? What are the conditions on n such that the game has a second mover advantage?
- Two players bargain over 1 unit of a divisible object. Bargaining starts with an offer of player 1, which player 2 either accepts or rejects. If player 2 rejects, then player 1 makes another offer; if player 2 rejects once more, then player 2 makes an offer. If player 1 rejects the offer of player 2, then once more it is the turn of player 1 where he makes two consecutive offers. As long as an agreement has not been reached this procedure continues. For example, suppose that agreement is reached at period 5, it follows that player 1 makes offers in period 1,2 then player 2 makes an o er in period 3, then player 1 makes offers in 4,5. Negotiations can continue indefinitely, agreement in period 't' with a division (x, 1- x) leads to payoffs ( , (1-x)).(The difference from Rubinstein's alternating offer bargaining is that player one makes two consecutive offers, whereas player 2 makes a single offer in her turn.) a. Show that there is a subgame perfect equilibrium in which player 2's…There are N women that all share the same toilet every day in an office building. Each sits on the toilet to use it and must decide whether to put down toilet paper on top of the toilet or sit directly on it. The toilet is cleaned just once a day at a random time and no one knows when this is done. It takes time and effort to put down toilet paper so if she knew the toilet was clean (either because she is the first to use it after it was cleaned or if all previous users after it was last cleaned put down toilet paper) she would rather not put down toilet paper. However, if she believes the toilet is dirty she would rather put down toilet paper. a) Is this game best described as simultaneous or sequential move? b) How many equilibria are there in this game? c) Briefly provide a general description of the equilibria. Which equilibrium/equilibria provide the highest social payoff?Normal Form: Which one of the following descriptions below is CORRECT according to this Normal Form shown? 1.) If Player 2 believes that Player 1 randomly choose H or L with same probability, then Player 2's expected for choosing HC is 2. 2.) If Player 1 has 20% chance to play H and 80% chance to play L, Player 2 has 40% chance to play HD and 60% chance to play LC; then Player 1's expected payoff is 2. 3.) If Player 2 randomly play one of its 4 strategies without any preference, then Player 1's expected payoff for playing L is 2.5. 4.) If Player 2 believes that Player 1 has no probability to play L, then Player 2 would prefer to choose HC or HD.
- When a famous painting becomes available for sale, it is often known which museum or collector will be the likely winner. Yet, the auctioneer actively woos representatives of other museums that have no chance of winning to attend anyway. Suppose a piece of art has recently become available for sale and will be auctioned off to the highest bidder, with the winner paying an amount equal to the second highest bid. Assume that most collectors know that Valerie places a value of $15,000 on the art piece and that she values this art piece more than any other collector. Suppose that if no one else shows up, Valerie simply bids $15,000/2=$7,500 and wins the piece of art. The expected price paid by Valerie, with no other bidders present, is $________.. Suppose the owner of the artwork manages to recruit another bidder, Antonio, to the auction. Antonio is known to value the art piece at $12,000. The expected price paid by Valerie, given the presence of the second bidder Antonio, is $_______. .A clothing store and a jeweler are located side by side in a shopping mall. If the clothing store spend C dollars on advertising and the jeweler spends J dollars on advertising, then the profits of the clothing store will be (36 + J )C - 2C 2 and the profits of the jeweler will be (30 + C )J - 2J 2. The clothing store gets to choose its amount of advertising first, knowing that the jeweler will find out how much the clothing store advertised before deciding how much to spend. The amount spent by the clothing store will be Group of answer choices $17. $34. $51. $8.50. $25.50.Two rival communications companies (Alpha and Beta) are both considering bringing out a revolutionary 8G wireless technology. Unfortunately, the costs of development are so high that the potential market could only support one firm. Both companies understand these possible outcomes. If one firm enters the 8G market and the other does not, the entering firm will receive $500 billion in profits over the next 5 years; the other firm will receive $100 billion over the same 5 years (by concentrating on their current 5G service). If neither enters the 8G field, they can both expect to receive $75 billion over the 5-year period, as they fight over the 5G market. Lastly, if both enter the 8G market, each will end up suffering a $50 billion loss over the same 5 years. Use a game table with “ENTER” and “STAY OUT” to decide each player’s options and the payoffs. Explain why each company has a strong reason to want to announce its intentions before the other company announces theirs.