Unformatted text preview: D D If the auction were a sealed second price auction it would necessarily yield a higher winning bid or tender than the English auction format. F [3 CI Private value auctions often result in the “winner’s curse”. F U B Common value auctions oﬁen result in the “winner’s curse”. 5. In a competitive market for widgets, the demand for widgets is Qd:24-2P and the supply is Qs=10P . Then: True False |_ _ The equilibrium will be at a price where demand is price inelastic. F I— l— Govemment intervention keeping prices at $1 will be associated with a dead-weight loss.
F U [I Overall surplus would be increased if the government required the industry to produce and sell an output of 25 units. F I] D At the equilibrium price, consumers' surplus equals $100. T 6. Nick Thompson, a wheat farmer in Saskatchewan selling in a perfectly competitive market, operates with
the following cost function: C(Q) = 4.5 + 6Q + 0.5QZ. True False U I] Nick earns negative proﬁts and will eventually shut down if price is between, and remains
between, 8 and 8.5. T [I I] Nick’s average ﬁxed cost is constant at 4.5. F El D If Nick’s proﬁt maximizing choice of Q is positive and he is earning negative proﬁts, then he must be operating at a point where his marginal cost is greater than his average total cost. F ...
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- Winter '09