Author Question: Farmers can raise either goats or ostriches on their land. Which of the following would cause the ... (Read 63 times)

stevenposner · **on:** Jun 29, 2018

Farmers can raise either goats or ostriches on their land. Which of the following would cause the supply of goats to decrease?

A) an increase in the price of ostrich feed B) an increase in the price of ostriches
C) a decrease in the price of goats D) an increase in the demand for goats

Question 2

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 9,000 for a good used car but only 3,000 for a lemon.

Sellers of good used cars value their cars at 7,500 each and sellers of lemons value their cars at 1,500 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) Sellers of lemons will drop out of the market.
B) Sellers of good used cars will drop out of the market.
C) Used cars will sell for 6,000.
D) Sellers of good used cars will incur losses.