Microeconomics help please!! 1. Suppose that a seller is auctioning off one hug
ID: 1094787 • Letter: M
Question
Microeconomics help please!!
1. Suppose that a seller is auctioning off one hug from either Dirk Mateer or Lee Coppock (who are the most popular economists among you kids these days) to you and your 499 classmates through a first-price, sealed-bid auction. You get one hug from the economist of your choice if you win, but the hug is non-transferable
Microeconomics help please!! 1. Suppose that a seller is auctioning off one hug from either Dirk Mateer or Lee Coppock (who are the most popular economists among you kids these days) to you and your 499 classmates through a first-price, sealed-bid auction. You get one hug from the economist of your choice if you win, but the hug is non-transferable ??? you can???t resell it. You value a hug from your favorite at $1000; you do not know the valuations of your classmates. What bid should you submit? THINK CAREFULLY. A. Less than $1000, because this is a common-value auction and you???re worried about the winner???s curse. B. $1000, since this is a common-value auction and the winner???s curse doesn???t apply. C. $1000, since this is a private-value auction and the winner???s curse doesn???t apply. D. $1 more than your estimate of the highest valuation among your classmates. E. Less than $1000, even though this is a private-value auction and the winner???s curse doesn???t apply. 2. Refer to the table below. What type of game does this payoff matrix represent? hw6 fig1.png A. 700 B. 600 C. 200 D. 400 hw6 fig2.png A. Neither strategy is dominant. B. Cooperate C. Cheat D. Both strategies are dominant. 4. Suppose there are three countries that are engaged in oil production. The total market output and market price are displayed in the table above. For simplicity, let us assume zero costs so that revenue equals profit. If the countries create a cartel and agree to mimic monopoly-like behavior, what level of output would each firm agree to produce? hw6 fig2.png A. coordination game B. network game C.cheating game D.prisoners' dilemma 3. Refer to the table below. What is Player 1's dominant strategy in this game?Explanation / Answer
The objective here is to maximise the Profit
Revenue = Price* Quantity
Cost = Quantity * Marginal Cost
Profit = Revenue - Cost
1) A) Profit = 1000*11000 - 11000*1000 = $ 0
B) Profit = 4000*8000 - 4000*1000 = $ 28000000
C) Profit = 6000*6000 -6000*1000 = $ 30000000
D) Profit = 2000*10000 - 1000*10000 = $ 10000000
Since C>B>D>A Answer: Option C
2) A) Profit = 5000*7000 - 1000*7000 = $ 28000000
B) Profit = 7000*5500 - 1000*5500 = $ 33000000
C) Profit = 8000*4000 - 1000*4000 = $ 28000000
D) Profit = 1000*11000 - 1000*11000 = $ 0
B>A=C>D Answer: Option B