FinalExam_2017(1).docx - Ec323 Final Exam 2017 Professor Fisman Page 1 of 6 Instructions This test consists of 10 multiple choice questions followed by

FinalExam_2017(1).docx - Ec323 Final Exam 2017 Professor...

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Ec323 Final Exam 2017 Professor Fisman Page 1 of 6 Instructions This test consists of 10 multiple choice questions followed by 5 short answer questions, with a total of 86 points available. You have 120 minutes (12:30 – 2:30pm) to complete the test. Make sure to put your name and BU ID This is a closed book test. You may not use your computer, phone, notes, calculator…anything other than a pen (and a rule if you like) during the test. Please enter your multiple choice answers on the first page of your blue book. Reminder that for short answer questions you should, as a rough guide, think about having about two paragraphs’ worth for each of the four questions. Don’t write random stuff: You’ll be rewarded for correct answers and penalized for irrelevant/incorrect content. Good luck!
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Ec323 Final Exam 2017 Professor Fisman Page 2 of 6 Multiple Choice (2 points each) 1.You’re bidding on an oil field off the coast of Brazil. It is a first price sealed bid auction with a dozen bidders, a good strategy is: a.Bid whatever you think the oil field is worth, so as to maximize your chances of winningb.Definitely don’t bid at all, because of the risk of bidding too highc.Bid a little lower than you think the oil field is worth, so you have a high chance of winning and will earn positive profits if you dod.None of the above 2.Under prospect theory, individuals will tend to: 3.In a 1983 article, Kahneman and Tversky gave subjects the following task: “Consider a regular six-sided die with four green faces and two red faces. The die will be rolled 20 times and the sequence of greens (G) and reds (R) will be recorded. Pick one of the sequences below. If your sequence comes up you will be paid $25: 1. RGRRR 2. GRGRRR 3. GRRRRR They found that option 2 was chosen by 65 percent of subjects. This can most easily be associated with which bias:
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  • Fall '09
  • NOORBUTT
  • Utility, Professor Fisman

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