Goods X and Y Both Have an Average Quality Index

question 15

Multiple Choice

Goods X and Y both have an average quality index of 50.For good X,the lowest quality is 45 and highest quality is 55.For good Z,the lowest quality is 25 and the highest quality is 75.One would predict that the lemons model will

• A) operate only for good Z.
• B) operate only for good X.
• C) apply equally to both markets.
• D) apply more to good X than to good Z.
• E) apply more to good Z than to good X.

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Definitions:

Classical Conditioning

Learning via the association between a stimulus present in the environment and one that occurs naturally.

CS And US

In classical conditioning, CS stands for conditioned stimulus and US stands for unconditioned stimulus.

Latent Learning

The process by which something is learned but not immediately expressed or noticeable until a later time.

Associative Learning

A learning process by which a subject links two stimuli or a behavior and a consequence.