There is a market with 100 people who want to sell their used cars and 100 people who want to buy a used car. it is well known generally that half the cars are lemons and half are plums. the current owner of a car (for sale) knows its quality but none of the prospective buyers know if a given car is a lemon or a plum. the owner of a lemon is willing to accept $500 and the owner of a plum is willing to accept $1,000. the buyers of a lemon are willing to pay $600 and the buyers of a plum are willing to pay $1,200.

(i) given buyers offer a price equal to the expected quality of used cars, how many sales ("trades") will take place in the market, and of whattype of quality (i. e., lemons or plums)?
(ii) what is the maximum amount of consumer surplus created from the sales?

Which of the following is a reason why it is important for students to study strategy and the strategic management process? answers: studying strategy and the strategic management process can give students tools to evaluate the strategies of firms that may employ them. it can be very important to a new hire's career success to understand the strategies of the firm that hired them and their place in implementing these strategies. while strategic choices are generally limited to very experienced senior managers in large organizations, in smaller and entrepreneurial firms many employees end up being involved in the strategic management process. all of these.

After discussing the options, the strategic management team has agreed that the pod coffee idea works well with the company's mission statement and decides that the company should move forward in exploring the pod coffee idea. in order to make sure that the pod coffee idea is a good one, and to see if there are other potential future endeavors to pursue, you must analyze the market situation and formulate a strategy. your boss asks you to start working on the pod coffee idea. what is your first stepa. your first step is to formulate a strategy for how to market the pod coffee concept. b. your first step is to consult with your boss and find out what he thinks about the pod coffee idea. c. your first step is to do some research to find out what your competitors are doing. d. your first step is to analyze the organization's strengths, weaknesses, opportunities, and threats.

Mr. smith recently faced a choice between being (a) an economics profes-sor, which pays $60,000/yr, or (b) a safari leader, which pays $50,000/yr. after careful deliberation, smith took the safari job, but it was a close call. "for a dollar more," he said, "i'd have gone the other way."now smith's brother-in-law approaches him with a business proposition. the terms are as follows: - smith must resign his safari job to work full-time in his brother-in-law's business.- smith must give his brother-in-law an interest-free loan of $100,000, which will be repaid in full if and when smith leaves the business. (smith currently has much more than $100,000 in the the business will pay smith a salary of $70,000/yr. he will receive no other payment from the business. the interest rate is 10 percent per year. apart from salary considerations, smith feels that working in the business would be just as enjoyable as being an economics professor. for simplicity, assume there is no uncertainty regarding either smith's salary in the proposed business or the security of his monetary investment in it. should smith join his brother-in-law and, if so, how small would smith's salary from the business have to be to make it not worthwhile for him to join? if not, how large would smith's salary from the business have to be to make it worthwhile for him to join?