Table 7-7
-Refer to Table 7-7. You have an extra ticket to the Midwest Regional Sweet 16 game in the men's NCAA basketball tournament. The table shows the willingness to pay of the four potential buyers in the market for a ticket to the game. You hold an auction to sell the ticket. Who makes the winning bid, and what does he offer to pay for the ticket?
A)Michael; $501
B)Michael; more than $400 but less than or equal to $500
C)Earvin; $400
D)Earvin; more than $350 but less than or equal to $400

Question

Table 7-7 
-Refer to Table 7-7. You have an extra ticket to the Midwest Regional Sweet 16 game in the men's NCAA basketball tournament. The table shows the willingness to pay of the four potential buyers in the market for a ticket to the game. You hold an auction to sell the ticket. Who makes the winning bid, and what does he offer to pay for the ticket?
A)Michael; $501 
B)Michael; more than $400 but less than or equal to $500 
C)Earvin; $400 
D)Earvin; more than $350 but less than or equal to $400

Quizplus · Accepted Answer

Since there are only four potential buyers and each is willing to pay a different amount, it is most likely that an auction will result in the highest bidder winning. Michael is the highest bidder at $500, but the question asks for what he offers "to pay" for the ticket, which could be less than his willingness to pay. Therefore, the winning bid is likely to be "more than $400 but less than or equal to $500." Earvin is not the winning bidder, as his maximum willingness to pay is only $400.

Table 7-7 -Refer to Table 7-7. You Have an Extra Ticket to Extra