Solved

-The Market for Used Cars Is Shown in the Above

Question 61

Multiple Choice

-The market for used cars is shown in the above figure.Buyers cannot tell whether any given car is a lemon.Ten percent (10%) of all cars are lemons.Which of the following statements is true? A) Only lemons are sold for $1,900. B) Only lemons are sold for $1,000. C) Buyers of lemons will pay too much for their cars. D) Buyers of good cars will pay too much for their cars.
-The market for used cars is shown in the above figure.Buyers cannot tell whether any given car is a lemon.Ten percent (10%) of all cars are lemons.Which of the following statements is true?


A) Only lemons are sold for $1,900.
B) Only lemons are sold for $1,000.
C) Buyers of lemons will pay too much for their cars.
D) Buyers of good cars will pay too much for their cars.

Correct Answer:

verifed

Verified

Unlock this answer now
Get Access to more Verified Answers free of charge

Related Questions

Q6: If you sell your DVD player on

Q16: A pooling equilibrium occurs when<br>A) dissimilar workers

Q24: A person who starts practicing poisonous snake

Q64: <img src="https://d2lvgg3v3hfg70.cloudfront.net/TB5322/.jpg" alt=" -The market for

Q66: If the government provides universal health insurance,what

Q67: A firm is more likely to adopt

Q87: If an employer cannot distinguish the ability

Q105: Life insurance companies often give applicants a

Q107: In a labor-market pooling equilibrium with high-skill

Q111: Which of the following is an example