The market for used cars is shown in the above figure. Neither buyers nor sellers can tell whether any given car is a lemon. Ten percent (10%) of all cars are lemons. Which of the following statements is TRUE?
A) All of the cars will be sold at $1,900.
B) No cars will be sold.
C) Only lemons will be sold at $1,600.
D) Only lemons will be sold at $1,000.
A
Economics
You might also like to view...
An excise tax levied on a product will impose a smaller relative burden on consumers (and a larger relative burden on sellers) when:
a. the supply of the product is relatively inelastic. b. the supply of the product is relatively elastic. c. the demand for the product is relatively elastic. d. either a or c is true.
Economics
In 2011, which category represented the largest source of receipts for the U.S. federal government?
a. Medicare b. Social Security c. corporate income taxes d. individual income taxes
Economics