Suppose That in New Crankshaft, Pennsylvania, the Quality Distribution of the 8,000

question 27

Multiple Choice

Suppose that in New Crankshaft, Pennsylvania, the quality distribution of the 8,000 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)$100.
• B)$4,000.
• C)$300.
• D)$200.
• E)$400.

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Definitions:

Maple Seedling

A young tree that has germinated from a maple seed and is in its early stages of growth.

Birch Stand

A group or cluster of birch trees growing together.

Underground Aquifers

Geological formations that can store, transmit, and yield groundwater to wells and springs.

Water Logging

The saturation of soil with water, often leading to reduced plant growth and agriculture problems.