The Following Graph Shows the Bid Value and Probability of Winning

question 98

Multiple Choice

The following graph shows the bid value and probability of winning an auction for an oil painting under a first-price sealed bid auction with private values. The bidder is willing to pay a maximum of £2000 for the oil painting. Refer to the graph to answer the question. The expected value from winning the auction at £1500 is equal to the area _____.

• A) A + B + C + D + E + F
• B) E + F+ D
• C) B + C + D
• D) C + D + E + F

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Definitions:

Absolute Zero

The lowest possible temperature where nothing could be colder and no heat energy remains in a substance, equivalent to -273.15°C or zero kelvin.

Publisher Type Score

A scoring metric or system that is proprietary to the publisher of a particular test, often used in educational and psychological assessments.

Standard Score

A standard score is a statistical measure that indicates how many standard deviations an entity is from the mean of the population.

SAT

A standardized test widely used for college admissions in the United States, assessing reading, writing, and math skills.