You are a risk-neutral bidder. You are participating in auction and you can safely assume that other bidders are playing equilibrium strategies.

Part a (10 points)

Suppose you are in a private-value setting (i.e., the other people's value for the good does not tell you anything about how much the good is worth to you.) Your best (unbiased but noisy) estimate of how much the good is worth to you is x. Suppose you are participating in a second-price sealed-bid auction. Should you bid less than x, exactly x, or more than x (or does the answer depend on something I have not told you)? If the number of other bidders increases, should your bid increase, decrease, or stay the same (or does the answer depend on something I have not told you)?

Part b (10 points)

Suppose you are in a private-value setting (i.e., the other people's value for the good does not tell you anything about how much the good is worth to you.) Your best (unbiased but noisy) estimate of how much the good is worth to you is x. Suppose you are participating in a rst-price sealed-bid auction. Should you bid less than x, exactly x, or more than x (or does the answer depend on something I have not told you)? If the number of other bidders increases, should your bid increase, decrease, or stay the same (or does the answer depend on something I have not told you)?

Part c (10 points)

Suppose you are in a common-value setting (i.e., the other people's value for the good is the same as yours.) Your best (unbiased but noisy) estimate of how much the good is worth is x. Suppose you are participating in a second-price sealed-bid auction. Should you bid less than x, exactly x, or more than x (or does the answer depend on something I have not told you)? If the number of other bidders increases, should your bid increase, decrease, or stay the same (or does the answer depend on something I have not told you)?

QUESTION 14 Suppose a , = 0.75, a; = 0.20, a, = 0.20, a = 0.10, and di = 0.20 For any given Ry, a equals and the economy a. 0.45; has experienced a positive aggregate demand shock O b. 0.05; has experienced a positive aggregate demand shock O c. 1.05; has experienced a positive aggregate demand shock d. 0; is in its long-run equilibrium O e. - 0.15; has experienced a negative aggregate demand shock QUESTION 15 Suppose a, = 0.75, a; = 0.15, a, = 0.20, dex = 0.10, and di = 0.20. For any given Ry, a equals and the economy a. 0; is in its long-run equilibrium b. 1.05; has experienced a positive aggregate demand shock O c. -0.15; has experienced a negative aggregate demand shock d. 0.45; has experienced a positive aggregate demand shock O e. 0.05; has experienced a positive aggregate demand shockQuestion 27 From 2006 to 2010, per capita real gross domestic product (GDP) in India grew an average of 7.119% per year. At that rate, according to the Rule of 70, in roughly how many years will the Indian economy double in size? 4.9 years b. 5.5 years C. 6.9 years d. 9.8 years e. 7.1 years Question 28 In 2011, per capita real gross domestic product (GDP) in Mexico was roughly $10,100. If Mexico experienced economic growth of 4.89% in 2012, per capita real GDP would increase to: 8. $15,353 b. $485. C. $21,042 $10,148. e. $10,585. Question 29 According to the Solow growth theory, developing nations will catch up to the developed nations: a. if developing nations become more politically stable. b. if developing nations invest in more education for their workers. C because developing nations can borrow technologies from the developed nations and learn from their mistakes. a. in about 100 years.Question 7 Expansionary monetary policy should initially change gross investment by more than necessary to reach full employment O less than necessary to reach full employment enough to reach full employment O an amount determined by the money multiplier Question 8 A contraction of the money supply _ ___. O increases the interest rate and decreases aggregate demand O increases both the interest rate and aggregate demand O lowers the interest rate and increases aggregate demand lowers both the interest rate and aggregate demandUse the following to answer question 3: Figure: Macroeconomics Equilibrium Aggregate price level Real GDP 3. (Figure: Macroeconomic Equilibrium) Refer to the figure Macroeconomics Equilibrium. Curve I refers to curve 2 refers to and curve 3 refers to A) short-run aggregate supply; long-run aggregate supply; aggregate demand B) long-run aggregate supply; short-run aggregate supply; aggregate demand C) aggregate demand; short-run aggregate supply; long-run aggregate supply D) aggregate demand; long-run aggregate supply; short-run aggregate supply Use the following to answer question 4: Table: Individual and Aggregate Consumption Functions Current Disposable Consumer Spending Income Andy Fred Mark $150 $100 $200 1,000 950 800 1,100 4. (Table: Individual and Aggregate Consumption Functions) According to the table Individual and Aggregate Consumption Functions, which represents Mark's individual consumption function? A) C=0.8YD. B) C=200 + 1.1YD. C) C= 450 + 0.5YD. D) C=200 + 0.9YD