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

question 16

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 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 quality 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 the car's value is at least

• A)$2,000.
• B)$100.
• C)$300.
• D)$200.
• E)$400.

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Definitions:

Two-Factor Theory

A psychological theory proposed by Schachter and Singer that suggests emotions are the result of physiological arousal and cognitive labeling of the cause of that arousal.

Physiological Arousal

The physical state of being alert and reactive, stemming from the activation of the sympathetic nervous system, including increased heart rate and blood pressure.

Pupil Contraction

The process of the pupil becoming smaller to regulate the amount of light entering the eye, often in response to bright light or focusing on close objects.

Conscious Experience

The awareness of one's own existence, sensations, thoughts, surroundings, and the flow of experiences that constitutes one's mind.