"Lemons" in Used Car Market 1 {* t( U9 H0 E* |2 }+ w* a
Suppose that you, a college student of somewhat limited means, are in the market for a used pickup truck. The following ad in a local used car publication catches your eyes.
6 h9 g' b9 P4 ~1 p& ~0 x8 Y 1993 Ford Ranger, bilk, 4WD, a/cAM/FM/cass., showroom condition. 0 H+ H% w% d! P% y
Call 555-1234 after 5 p.m.
; a; E* F' k# t9 E5 p+ J This is exactly the kind of vehicle you want, so you call to inquire about the price. The price you are quoted over the phone is $2,000 lower than the price for this model with this equipment listed in a used car guidebook. Instead of being ecstatic, however, you are suspicious.
# d* @- ^* v! h& l) D. D0 R For many products, when you must pay less than the going rate, you believe you are getting a great deal. This is not necessarily the case for used cars or other durable goods(washing machines and television sets, for example) because with expensive products-or, what is essentially the same thing, products with high replacement costs-you must be particularly careful about getting a "lemon." Or a product of substandard quality. % d7 y* {/ N. Q u( v9 X/ `
In addition to asking the price, the age of a car-or any other consumer durable-is a factor when you are trying to determine whether a seller is attempting to unload a lemon. While people have all sorts of reasons for wanting to sell their cars-even relatively new cars-most people hold off until they have put many thousands of miles on a car or until the used car is several years old. You would probably be as suspicious of a car that is "too new" as you would a car that is "too good” a deal. In fact, you are probably willing to pay a high price for a high-quality used car. While this price would certainly be acceptable to the seller, the competitive market might not facilitate such trades.
4 i$ m+ [5 F9 V' x% S& L9 v 1. The beginning of this passage assumes that college students
3 k& Z* M5 c1 i3 h3 y: Q# C- \/ A A) Are very clever but not very rich. % K. I( b4 V5 M/ r9 b& S
B) Are very capable but not very diligent.
) `+ s! Q4 l3 J C) Have limited material resources " R# o& b8 ~3 |- A# T' B2 S) s
D) Are not rich.
& e+ j$ o- X! N( ]% Y 2. The passage indicated that, sometimes when you find a product of an unexpectedly low price.
8 k2 S B5 H7 x7 X: H- h* k7 w A) You are very happy. ' f8 V, N( V! ?; [) O) D
B) You are rather suspicious. 7 U. U+ H# A* c/ J' T. s
C) You are filled with happiness as well as surprise.
* L K0 y2 s1 V3 r& r! O D) You feel uneasy. |