Suppose That in a Market for Used Cars,there Are Good

question 46

Multiple Choice

Suppose that in a market for used cars,there are good used cars and bad used cars (lemons) .Consumers are willing to pay as much as $9,000 for a good used car but only $3,000 for a lemon.Sellers of good used cars value their cars at $7,500 each and sellers of lemons value their cars at $1,500 each.Buyers cannot tell if a used car is reliable or is a lemon.Based on this information,what is the likely outcome in the market for used cars?

• A)Sellers of good used cars will drop out of the market.
• B)Sellers of good used cars will incur losses.
• C)Sellers of lemons will drop out of the market.
• D)Used cars will sell for $6,000.

Identify the causes and effects of the Protestant Reformation on European society and politics.

Explain the concept of predestination and its importance in Calvinist doctrine.

Describe the role of the Act of Supremacy in establishing the Church of England and its significance for Henry VIII's reign.

Understand how the Renaissance influenced humanist thought and the Protestant Reformation.

---

Definitions:

Par Value

The face value of a bond or the stock value stated in the corporate charter, representing the minimum standard value.

Zero-Coupon Bond

A debt security that does not pay interest but is traded at a deep discount, rendering a profit at maturity when the bond is redeemed for its full face value.

Yield To Maturity

The total return anticipated on a bond if it is held until the date it matures, accounting for interest payments and capital gains.

Forward Rate

The predetermined interest rate for a loan or investment that will start in the future, often derived from current yield curves.