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

question 10

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 $300.Owners of good used cars are willing to sell them for prices above $1,300 but will keep them if the price is lower than $1,300.There is a large number of potential buyers who are willing to pay $600 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 all used cars sell for $800.
• B)There will be an equilibrium in which lemons sell for $300 and good used cars sell for $1,300.
• C)There will be an equilibrium in which all used cars sell for $1,350.
• D)The only equilibrium is one in which all used cars on the market are lemons and they sell for $600.
• E)There will be an equilibrium in which lemons sell for $600 and good used cars sell for $2,100.

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Definitions:

Bulimia

An eating disorder marked by binge eating followed by methods to avoid weight gain, such as vomiting (purging), excessive exercise, or fasting.

Eating Disorder

A mental disorder defined by abnormal eating habits that negatively affect a person's physical or mental health, including anorexia nervosa, bulimia nervosa, and binge-eating disorder.

Anorexia Nervosa

A mental disorder characterized by an intense fear of gaining weight and a distorted body image, leading to severe restriction of food intake.

Pyromaniac

An individual with an irresistible impulse to start fires, driven by an emotional satisfaction from seeing the fire and its consequences.