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:

Expectancy Motivation Theory

A psychological theory suggesting that an individual's motivation to pursue a certain action is influenced by their expectation of the outcome and the value they place on that outcome.

Mentors

Experienced individuals who provide guidance, advice, and support to less experienced persons, fostering their development and growth.

Formally Assigning

The process of officially allocating responsibilities, tasks, or resources to individuals or teams.

Effective Approach

A method or technique that has been proven to lead to the desired outcome or success in achieving specific goals.