Auctions Are Used in Place of Markets When the Items

question 12

Multiple Choice

Auctions are used in place of markets when the items traded are unique (e.g. ,a Ming vase or a right to drill for oil) .Which of the following examples are typically sold using Vickrey auction methods?

• A)For-sale-by-owner houses
• B)Household furnishings
• C)Items sold in Filene's Basement,with the price discounted after a certain date
• D)Vintage postage stamps

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Definitions:

Short Run

A period in which at least one input, such as plant size, is fixed and cannot be changed by the firm.

Fixed Plant Capacity

The maximum output that a facility can produce in a given period under normal conditions, determined by its physical size and design.

Diminishing Returns

An economic principle stating that as investment in a particular area increases, the rate of profit or benefits gained from additional investment will eventually decline.

Explicit Costs

Direct, out-of-pocket expenses incurred in the operation of a business or investment.