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wrote...
Posts: 205
A month ago



Figure 14.2 represents the market for used cameras. Suppose buyers are willing to pay $125 for a plum (high-quality) used camera and $25 for a lemon (low-quality) used camera. If buyers believe that 50% of the used cameras in the market are lemons (low quality), how much will pay for a used camera?

▸ $25

▸ $50

▸ $75

▸ $125
Textbook 
Survey of Economics: Principles, Applications and Tools
Edition: 6th
Authors:
Read 269 times
12 Replies
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Answer verified by a subject expert
wrote...
Posts: 224
Rep: 8 0
A month ago
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$75
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wrote...
A month ago
I appreciate what you did here, answered it correctly Smiling Face with Open Mouth
wrote...
A month ago



Figure 14.2 represents the market for used cameras. Suppose buyers are willing to pay $125 for a plum (high-quality) used camera and $25 for a lemon (low-quality) used camera. If buyers believe that 50% of used cameras in the market are lemons (low quality), how many plums (high quality) will be supplied by sellers?

▸ 10

▸ 15

▸ 20

▸ 25
wrote...
A month ago
10
wrote...
A month ago



Figure 14.2 represents the market for used cameras. Suppose buyers are willing to pay $125 for a plum (high-quality) used camera and $25 for a lemon (low-quality) used camera. If buyers believe that 50% of used cameras in the market are lemons (low quality), what fraction of used cameras sold will actually be lemons (low quality)?

▸ 10/35

▸ 25/35

▸ 10/25

▸ All of the cameras sold will be lemons.
wrote...
A month ago
25/35
wrote...
A month ago
This calls for a celebration Person Raising Both Hands in Celebration
wrote...
A month ago



Figure 14.2 represents the market for used cameras. Suppose buyers are willing to pay $125 for a plum (high-quality) used camera and $25 for a lemon (low-quality) used camera. If buyers believe that 50% of used cameras in the market are lemons (low quality), what fraction of used cameras sold will actually be plums (high quality)?

▸ 10/25

▸ 25/35

▸ 10/35

▸ None of the cameras sold will be plums.
wrote...
A month ago
10/35
wrote...
A month ago



Figure 14.2 represents the market for used cameras. Suppose buyers are willing to pay $125 for a plum (high-quality) used camera and $25 for a lemon (low-quality) used camera. Initially buyers believe that 50% of used cameras in the market are lemons (low quality). Compared to the outcome with neutral expectations, how many fewer cameras are sold in equilibrium?

▸ 10

▸ 15

▸ 20

▸ 25
wrote...
A month ago
20
wrote...
A month ago
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