In Rustbucket, Michigan, There Are 200 Used Cars for Sale

question 9

Multiple Choice

In Rustbucket, Michigan, there are 200 used cars for sale, half of them are good and half of them are lemons.Owners of lemons are willing to sell them for $100.Owners of good used cars are willing to sell them for prices above $1,100 but will keep them if the price is lower than $1,100.There is a large number of potential buyers who are willing to pay $200 for a lemon and $2,100 for a good car.Buyers can't tell good cars from bad, but original owners know.

• A)There will be an equilibrium in which lemons sell for $100 and good used cars sell for $1,100.
• B)There will be an equilibrium in which all used cars sell for $600.
• C)The only equilibrium is one in which all used cars on the market are lemons and they sell for $200.
• D)There will be an equilibrium in which all used cars sell for $1,150.
• E)There will be an equilibrium in which lemons sell for $200 and good used cars sell for $2,100.

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Definitions:

Parallel Processing

The ability of the brain to simultaneously process incoming stimuli of differing quality, a fundamental mechanism underlying sensory perception and cognition.

Hallucinations

Perceptions in a conscious and awake state in the absence of external stimuli which have qualities of real perception, often in visual or auditory forms.

Selective Attention

The cognitive process of focusing on a particular object or task while ignoring other irrelevant information.

Hypnotic Pain Relief

A therapeutic technique involving hypnosis to manage and reduce pain perception in individuals without the use of pharmaceutical drugs.