Gerald is considering buying a used Ford Focus. From reading car magazines, Gerald knows that half of all Ford Focuses up for sale have mechanical problems (they’re lemons), and the other half run just fine (they’re plums). Gerald is willing to pay $10,000 for a plum, but only $4,000 for a lemon. People who own plums are willing to sell them for any price at or above $8,000, and people own lemons are willing to sell them for any price at or above $2,000.
(A) If everyone knows whether a used car is a lemon or a plum, is Gerald likely to purchase a car?
(B) Now suppose Gerald cannot tell whether a used car is a lemon or a plum. Instead, sellers have private information about the quality of their cars. If half of all used Ford Focuses for sale are lemons and half are all plums, then if Gerald is risk-neutral, what's the most he would be willing to pay for a used Ford Focus?
If Gerald offered to pay the owner of used a Ford Focus this amount, would he be likely to be buying a lemon or a plum?

Which type of market are you in if your company, along with three other companies, controls 95 percent of the total music industry?

Suppose a firm faces a fixed price of output, 푝푝= 1200. the firm hires workers from a union at a daily wage, 푤푤, to produce output according to the production function 푞푞= 2퐸퐸12. there are 225 workers in the union. any union worker who does not work for this firm is guaranteed to find nonunion employment at a wage of $96 per day. a.what is the firm’s labor demand function? b.if the firm is allowed to choose 푤푤, but then the union decides how many workers to provide (up to 225) at that wage, what wage will the firm set? how many workers will the union provide? what is the firm’s output and profit? what is the total income of the 225 union workers? c.now suppose that the union sets the wage, but the firm decides how many workers to hire at that wage (up to 225). what wage will the union set to maximize the total income of all 225 workers? how many workers will the firm hire? what is the firm’s output and profit? what is the total income of the 225 union workers? [hint: to maximize total income of union, take the first order condition with respect to w and set equal to 0.]

Carey company is borrowing $225,000 for one year at 9.5 percent from second intrastate bank. the bank requires a 15 percent compensating balance. the principal refers to funds the firm can effectively utilize (amount borrowed − compensating balance). a. what is the effective rate of interest? (use a 360-day year. input your answer as a percent rounded to 2 decimal places.) b. what would the effective rate be if carey were required to make 12 equal monthly payments to retire the loan?