Suppose That in New Crankshaft, Pennsylvania, the Quality Distribution of the 3,000

question 18

Multiple Choice

Suppose that in New Crankshaft, Pennsylvania, the quality distribution of the 3,000 used cars on the market is such that the number of used cars of value less than V is V/2.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 $100 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)$200.
• B)$300.
• C)$1,500.
• D)$100.
• E)$400.

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Definitions:

Social Entrepreneurship

The pursuit of entrepreneurial ventures with a major emphasis on achieving social goals and positive externalities.

Not-For-Profit

A tax status granted to companies performing functions deemed by Congress to be socially desirable that exempts them from income tax and, in some cases, allows them to receive tax-deductible donations.

Entrepreneurial Spirit

An attitude and approach characterized by innovation, risk-taking, and the ability to see and seize opportunities for business or personal gain.

Entrepreneur

An individual who undertakes the creation, organization, and ownership of an innovative business with potential for growth and financial reward.