Suppose That in New Crankshaft, Pennsylvania, the Quality Distribution of the 4,000

question 13

Multiple Choice

Suppose that in New Crankshaft, Pennsylvania, the quality distribution of the 4,000 used cars on the market is such that the number of used cars of value less than V is . Original owners must sell their used cars. Original owners know what their cars are worth, but buyers can't determine a car's value until they buy it. An owner can either take his car to an appraiser and pay the appraiser $400 to appraise the car (accurately and credibly) or sell the car unappraised. In equilibrium, car owners will have their cars appraised if and only if their value is at least

• A) $400.
• B) $2,000.
• C) $1,200.
• D) $800.
• E) $1,600.

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Definitions:

Book Value

The value of an asset according to its balance sheet account balance. For assets, the value is based on the original cost of the asset less any depreciation, amortization, or impairment costs made against the asset.

Unearned Ticket Revenue

Unearned ticket revenue is money received from ticket sales before the event or service has been provided, considered a liability until the service is rendered.

Season Tickets

Tickets sold for a set of events, usually for a sports season, concerts, or theatre productions, allowing the holder to attend all events in the series.

Football Season

The period during which competitive football games or matches are played, typically on an annual basis.