The market for used cars is shown in the above figure. Buyers cannot tell whether any given car is a lemon. Forty percent (40%) of all cars are lemons. However, sellers can switch to selling lemons at lower costs
Which of the following statements is TRUE? A) Only lemons are sold for $1,600.
B) Only lemons are sold for $800.
C) All the sellers of good cars will switch to selling lemons.
D) 40% buyers will get lemons.
C
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Which of these options best reflects Jim’s opportunity cost of operating his own business?
A. The total amount of money he spends to obtain capital equipment B. The value of Jim’s managerial skills that are used to run the business C. The cost of hiring his laborers D. All of the responses are correct.
A tax is imposed on orange juice. Consumers will bear no burden from this tax if the: a. demand for orange juice is perfectly inelastic
b. supply curve for orange juice is unit elastic. c. demand for orange juice is unit elastic. d. supply curve for orange juice is perfectly inelastic.
The ________ effect of a price change states that when the price of a good falls, that good becomes cheaper compared to other goods and services so consumers tend substitute that good for other goods
a. Substitution b. Demand c. Income d. Supply
In contrast to richer countries, most residents of poorer nations will have
A. only some primary education. B. primary and secondary education. C. higher education. D. higher levels of productivity.