How does adverse selection affect the economic efficiency of the used car market?
What will be an ideal response?
Since potential buyers have a difficult time distinguishing good cars from lemons, the price of good cars declines to below its true value.
You might also like to view...
Which of the following is an example of barter?
a. A parent gives a teenager a $10 bill in exchange for her babysitting services. b. A homeowner gives an exterminator a check for $50 in exchange for extermination services. c. A barber gives a plumber a haircut in exchange for the plumber fixing the barber's leaky faucet. d. All of the above are examples of barter.
The country of Elbia has a GDP of $2,000 . consumption of $1,300, and government purchases of $400 . Which of the following is equal to $300?
a. domestic investment b. domestic investment plus net capital outflow c. domestic investment minus net capital outflow d. None of the above is correct.