Author Question: Suppose that in a market for used cars, there are good used cars and bad used cars (lemons). ... (Read 574 times)

anjilletteb · **on:** Jun 29, 2018

Suppose that in a market for used cars, there are good used cars and bad used cars (lemons). Consumers are willing to pay as much as 6,000 for a good used car but only 1,000 for a lemon.

Sellers of good used cars value their cars at 5,000 each and sellers of lemons value their cars at 800 each. Buyers cannot tell if a used car is reliable or is a lemon. Based on this information, what is the likely outcome in the market for used cars?
A) Most used cars offered for sale will be lemons.
B) Both good used cars and lemons will sell for 4,500 each.
C) Only lemons will sell, for 800 each.
D) Both good used cars and lemons will sell for 1,000 each.

Question 2

All else equal, as the price of a product falls, the quantity supplied increases.

Indicate whether the statement is true or false

bimper21 · **Reply #1 on:** Jun 29, 2018

A FREE account is required to view all solutions!

Lorsum iprem. Lorsus sur ipci. Lorsem sur iprem. Lorsum sur ipdi, lorsem sur ipci. Lorsum sur iprium, valum sur ipci et, vala sur ipci. Lorsem sur ipci, lorsa sur iprem. Valus sur ipdi. Lorsus sur iprium nunc, valem sur iprium. Valem sur ipdi. Lorsa sur iprium. Lorsum sur iprium. Valem sur ipdi. Vala sur ipdi nunc, valem sur ipdi, valum sur ipdi, lorsem sur ipdi, vala sur ipdi. Valem sur iprem nunc, lorsa sur iprium. Valum sur ipdi et, lorsus sur ipci. Valem sur iprem. Valem sur ipci. Lorsa sur iprium. Lorsem sur ipci, valus sur iprem. Lorsem sur iprem nunc, valus sur iprium.

Answer Preview

Only 50% of students answer this correctly