Question : Rebecca participating in a Dutch auction for an antique necklace. : 1377583

Rebecca is participating in a Dutch auction for an antique necklace. The total number of bidders in this auction is 10. Rebecca values the necklace for $45,000 while all the other bidders value it below $45,000.

49) Refer to the scenario above. What is the optimal strategy of each bidder?

A) Each bidder should bid up to his/her maximum willingness to pay for the necklace.

B) Each bidder should bid above his/her maximum willingness to pay for the necklace.

C) Each bidder should bid up to 9/10 of his/her valuation of the necklace.

D) Each bidder should bid up to 4/5 of his/her valuation of the necklace.

50) Refer to the scenario above. If the best response of one bidder is to place a bid of $9,000, what is her maximum willingness to pay for the necklace?

A) $10,000

B) $9,000

C) $4,500

D) $18,000

51) Refer to the scenario above. Rebecca should place a bid of ________.

A) $40,500

B) $45,000

C) $50,000

D) $55,000

52) Refer to the scenario above. The seller will earn a revenue of ________.

A) $45,000

B) $40,500

C) $5,000

D) $4,500

53) Refer to the scenario above. If the number of participants in the auction increases to 20, Rebecca should place a bid of ________.

A) $45,000

B) $42,750

C) $4,500

D) $40,500

54) Refer to the scenario above. If Rebecca wins the auction, she will earn a surplus of ________.

A) $1,000

B) $4,500

C) $5,000

D) $45,000

55) The larger the number of bidders in an open outcry Dutch auction, ________.

A) the lower is the maximum willingness to pay of each bidder

B) the smaller is the consumer surplus earned by the winner

C) the larger is the quantity offered by the auctioneer for auction

D) the lower is the value of the starting bid

56) Which of the following is a similarity between an English auction and a Dutch auction?

A) The second-highest bidder wins the good in both the auctions.

B) The bidder who values the good the most wins it in both the auctions.

C) The bidders submit their bids privately at the same time in case of both the auctions.

D) In both auctions, the bidders submit their bids privately at different times during the bidding process.

57) Which of the following is a difference between an English auction and a Dutch auction?

A) Bids are placed publicly in an English auction while bids are placed privately in a Dutch auction.

B) The bidder who values the good the most wins in an English auction while the bidder who values the good the least wins in a Dutch auction.

C) An English auction is an ascending price auction while a Dutch auction is a descending price auction.

D) An English auction is a descending price auction while a Dutch auction is an ascending price auction.

58) In a first-price sealed-bid auction, ________.

A) bidders submit their bids privately

B) bidders place their bids one after another publicly

C) bidders know each other’s bids

D) bidders bid above their willingness to pay

59) Which of the following is true of a first-price sealed-bid auction?

A) Bidders directly compete with each other.

B) Bidders place their bids simultaneously.

C) Bidders know each other’s bids.

D) Bidders always bid below their willingness to pay.

60) In a first-price sealed-bid auction, the ________ bidder wins the good being auctioned.

A) lowest

B) second-highest

C) highest

D) first