A Seller Decides to Sell an Object by Means of a Sealed-Bid

question 1

Multiple Choice

A seller decides to sell an object by means of a sealed-bid, second-price auction without a reservation price.There are two bidders.The seller believes that for each of the two bidders there is a probability of 1/2 that the bidder's value for the object is $600 and a probability of 1/2 that the bidder's value is $300.The seller believes that these probabilities are independent between bidders.If the bidders bid rationally, what is the seller's expected revenue from the auction?

• A)$360
• B)$450
• C)$375
• D)$600
• E)$420

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Definitions:

Memory Researcher

A scientist who specializes in studying how memory is formed, retained, and retrieved, including the understanding of memory disorders.

Problem-Solving Activity

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Model of memory organization that assumes information is stored in the brain in a connected fashion, with concepts that are related stored physically closer to each other than concepts that are not highly related.

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