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:

Twelve-step

is a program designed to assist individuals in overcoming addiction, compulsion, or other behavioral problems, based on a set of guiding principles.

Self-help Groups

Community-based groups where individuals with similar issues or conditions offer mutual support and share experiences.

Twelve-step Groups

Support groups that follow a set of guiding principles for recovery from addiction, compulsion, or other behavioral problems, famously including Alcoholics Anonymous.

Alcoholics Anonymous

A self-help group and program designed to assist individuals in recovering from alcoholism through mutual support and a series of steps.