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wrote...
Posts: 204
4 weeks 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:
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12 Replies
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Posts: 224
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4 weeks ago
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$75
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wrote...
4 weeks ago
I appreciate what you did here, answered it correctly Smiling Face with Open Mouth
wrote...
4 weeks 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...
4 weeks ago
10
wrote...
4 weeks 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...
4 weeks ago
25/35
wrote...
4 weeks ago
This calls for a celebration Person Raising Both Hands in Celebration
wrote...
4 weeks 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...
4 weeks ago
10/35
wrote...
4 weeks 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...
4 weeks ago
20
wrote...
4 weeks ago
Thanks
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