Suppose you own a plum (high-quality) used car that you are thinking about selling. Further, suppose you know that buyers assume that there is a 30% chance of getting a plum, and that 8 of 10 cars currently in the used car market are lemons (low-quality). Would you likely sell your car?
What will be an ideal response?
You are more likely to do so than you typically would. Since buyers overestimate the probability of getting a plum, you know that you can get a better price than you normally would by entering the market.
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Unlike a firm in pure competition, a monopolist may be able to
a. block the entry of new firms into the industry. b. continue to earn economic profits in the long run. c. earn economic profits in the short run. d. both block the entry of new firms into the industry and continue to earn economic profits in the long run.
The statistical significance of the slope coefficient can only be tested using the F test
Indicate whether the statement is true or false
When speed boat sales rise, the city of Las Vegas takes in more revenue. The omitted common variable between these outcomes is likely to be:
A. childhood obesity. B. prices of Las Vegas flights. C. increased disposable income. D. life jacket sales.
The Great Depression was an era marked by
a. steady growth in GDP and a decline in the rate of unemployment. b. a prolonged period of high unemployment and output substantially below its potential. c. a large decline in the stock market followed by a steady recovery. d. a failure of expansionary monetary policy to stimulate output and employment.