Suppose there are only two kind of cars in the market for used cars: lemons and good cars. A lemon is worth $1,000 both to its current owner and to anyone who buys it. A good car is worth $8,000 to its current and potential owners
Buyers can't tell whether a car is a lemon until after they have bought the car, and there is no warranty. What is the prevailing price of a used car? A) $8,000
B) $1,000
C) $4,500
D) The prevailing price depends on how many lemons and how many good cars are traded.
B
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Rather than go out to eat by yourself, you decide to stay at home and fix dinner for yourself and your two roommates. Your roommates applaud your decision
Your roommates tell you that your decision to eat at home has no opportunity cost because you already have all the dinner ingredients in your pantry. Is this comment correct?
Rational expectations theory implies that the more completely the effects of policy makers are foreseen, the smaller their short run effects on real output and unemployment, and the greater their short run effects on the price level
a. True b. False Indicate whether the statement is true or false
An airline is considering adding a flight from Chicago to Sioux Falls. Total cost of the flight is $5,500 . Variable cost is $2,000 . Revenue from the flight is expected to be $3,000 . Should the flight be added?
a. No, the revenue ($3,000 . is below the cost ($5,500.) b. No, the addition to profit is very small and not worth the effort. c. Yes, profit increases by $1,000 ($3,000 ? $2,000.) d. Yes, profit increases by $3,000.
If M were 10,000, P were 10, and Q were 5,000, how much would V be?
What will be an ideal response?