Two Types of Existing Houses Are for Sale: Ones with a Cracked

question 4

Multiple Choice

Two types of existing houses are for sale: ones with a cracked foundation and ones without.In all other respects,they are identical.Houses without cracked foundations are worth $200,000;those with cracked foundations are worth $200,000 minus the $20,000 to fix the crack,or $180,000.The frequency of solid foundations is 80%.Sellers know which type of house they have,but buyers cannot detect a crack.No seller must sell his house in order to move,and thus no one accepts anything less than the value of their house.
-Refer to the information above.Usually,the seller of a home is legally required to disclose any and all defects in the home that they know exist.This example demonstrates that the requirement helps

• A) all buyers and solid foundation home sellers.
• B) only buyers.
• C) all buyers and all sellers.
• D) only sellers.
• E) all buyers and cracked foundation home sellers.

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Definitions:

Social system

An organized collection of parts that are integrated to accomplish an overall goal; often refers to a society's structured network of relationships and institutions.

Institutional

Relating to an established organization, especially one with societal, educational, or governmental functions.

Organization

An entity comprising multiple people, such as an institution or an association, that has a particular purpose, such as a business or government department.

Organization levels

The different layers of authority and responsibility within an organization, typically ranging from senior executives to frontline employees.