13. If you are willing to pay $1,000 for a used stereo that is a

“cherry” and $200 for a used stereo that is a “lemon,”

how much will you be willing to offer to purchase a stereo if there is a 50 percent chance that the stereo is a lemon? If owners of cherry stereos want $700 for their cherries, how will your estimate of the chance of getting a cherry change? (LO8-4)