Managerial economics Problem Sets

Exam 2 ? Past Questions Managerial Economics Professor: Arce M. Points of Interest ? I am releasing these questions as a courtesy to you. I do not provide answers to these questions nor do I entertain inquiries about them. I am fully confident that the questions can be capably vetted within your group because they were answered by past students during the time constraints of an exam. ? A typical in-class exam consists of 3-6 questions and lasts 1hr 15minutes. ? Some past exam questions are now part of your problem sets. These questions are not repeated here. ? Neither these questions nor the problem sets exhaustively represent all possible material for exam 1. You are responsible for all the material covered in the notes. ? It is unlikely that I will be asking any of these questions on your exam. Example of Exam Instructions: ? All answers (including short answer questions) must include artwork and/or algebra unless explicitly specified. ? Correct answers without accompanying (and correct) economic analysis will receive zero credit. ? To receive partial credit, you must show your work. ? Your answers are required to be concise and self-explanatory. Keep your creative writing skills on a leash. ? It is disingenuous to use one question to answer another unless they are explicitly related. Disingenuous answers will be penalized. ? Do not make irrelevant statements within your answers – you will be penalized if they are incorrect. 2 1. Consider a private-value auction where it is assumed that bidders have valuations that are uniformly distributed between 1 and 10. There are 3 bidders and your valuation is 7. a. What should you bid in a Dutch (oral descending price) auction for this item? b. What should bid in a 2nd price sealed-bid auction for this item? c. Explain how your answers to (a) and (b) CHANGE under a common value auction. Refer to LEGAL behavior only. 2. For the game to the right. a. Find the Nash equilibria for the game below. b. Identify the outcomes that...