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Author Question: You are in the market for a used 2006 Honda Accord. You know that half of the 2006 Accords are ... (Read 23 times)

DelorasTo

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on: Apr 19, 2019

Question 1

With ________, the quality of what is being offered in a transaction matters and is not easily demonstrated.


◦ asymmetric information
◦ adverse selection
◦ risk aversion
◦ moral hazard

Question 2

You are in the market for a used 2006 Honda Accord. You know that half of the 2006 Accords are lemons and half are peaches. If you could be assured that the Accord you were buying was a peach, you would be willing to pay up to $10,000. On the other hand, you would only be willing to pay $2,000 for a lemon. You have no ability to discern whether any particular Accord is a lemon or a peach. Sellers of Accords, on the other hand, are likely to know whether their particular car is a lemon or a peach. Suppose sellers of lemons will sell their cars for $1,500 or more and peach sellers will be willing to sell their cars for $8,500 or more. You are willing to offer ________ for a car of unknown quality and ________ are willing to sell you their car.


◦ $2,000; lemon owners only
◦ $5,000; lemon owners only
◦ $6,000; lemon owners only
◦ $8,500; both lemon and peach owners
Principles of Economics ¦ Case, Fair, Oster ¦ 12th Edition
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Marked as best answer by DelorasTo on Apr 19, 2019

lou

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Reply #1 on: Apr 19, 2019
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.
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DelorasTo

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Reply 2 on: Apr 19, 2019
:D TYSM

mjenn52

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Reply 3 on: Yesterday
Great answer, keep it coming :)

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