Once a private information is made public and it is immediately reflected in the price, then the market is a strong form of market efficiency. True or False?
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Once a private information is made public and it is immediately reflected in the price, then the market is a strong form of
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- In the used-car market there are good cars and bad cars. Everyone knows that half of the used cars are good and half of them are bad, but only the owner knows exactly whether his particular car is good or bad. If a car is good, it is worth $3000 to its owner but worth $4000 to a potential buyer. A bad car, on the other hand, is worth only $2000 to its owner and $1000 to a potential buyer. A potential buyer has no way of telling whether a particular car is good or bad. However, she is aware of the fact that the seller knows the car's quality. (VI.1) If the price of a car is $2500, what type of car will be offered for sale? Only bad cars/ All cars/ Only good cars/ No car. (choose the right answer) Should a potential buyer buy a car that is being offered for sale at $2500? Yes/ No (choose the right answer) If the price of a car is $3500, what type of car will be offered for sale? Only bad cars/ Only good cars/ All cars/ No car. (choose the right answer) What is the buyer's expected value…Subway rides during rush hour The subway system in your city is approximately in equilibrium. Given current schedules, riders don't wait long for a train. Platforms are busy but not overcrowded. In other words, rush-hour fares are such that the quantity of rides supplied is about equal to the quantity demanded. The directors of the system now come up with an idea to get more people out of their cars and into the trains. Each time a rider buys a ride, 50 cents will be automatically deposited into the rider's bank account. The funding for this subsidy is to come from diverting a portion of gasoline taxes now paid by motorists. If this scheme works to increase ridership, the system is ready to provide more rides and to adjust fares as needed to keep the system in approximate equilibrium. When the plan goes into effect, what is likely to happen in the diagram above? Select one: O a. D will increase, resulting in more rides at a higher fare. O b. S will increase, resulting in more rides at…Why does a seller with a good reputation face a different opportunity cost foroffering poor-quality goods than a seller with no reputation to lose?
- Product X is produced with a constant marginal cost 12. Consumption of Q units per consumer provides private marginal benefit of PMB = 26 - 2Q. There are 40 consumers. Give your answer to 1 decimal place. a) What is the efficient quantity if the good is rival? [1] b) What is the efficient quantity if the good is non-rival? [1]The answer is not quasi-private. Already tried that choiceHow large should a Pigovian tax be to achieve efficiency?
- In Hayward, there are 100 people who want to sell their used cars. The problem is that nobody except the original owners know which are which. Owners of lemons will be happy to get rid of their cars for any price greater than $200. Owners of peaches will be willing to sell them for any price greater than $1,500 but will keep them if they can't get $1,500. There are a large number of buyers who would be willing to pay $2,500 for a peach but would pay only $300 for a lemon. When these buyers are not sure of the quality of the car they buy, they are willing to pay the expected value of the car, given the knowledge they have. What is the minimum probability for a used car to be a peach such that peaches stay in the market? Ő O 0.33 0.67 0.55 0.5Question about HOTELLING MODEL Two burrito shops at either end of a one-mile road. The road has a uniform distribution of customers along it. People's reservation price for burrito is $10.00, The disutility that people get from walking is $5.00 per mile. If the vendors charge $8.00 for a burrito, what proportion of people on the road will buy a burrito (answer should be number between 0 and 1)? Could you also provide formulas that you used? Answer:Economics Explain why, in a first price sealed bid auction for a good with only private value, the good being auctioned is not always sold to the bidder with the highest valuation.