There is an adverse selection problem in the market for used cars because:
A. Owners of poor-quality cars have a strong incentive to sell their cars, while owners of high-quality used cars have more incentive to keep their cars
B. Owners of high-quality cars will have a strong incentive to sell their cars to obtain the higher prices, while owners of poor-quality cars will have more incentive to keep theirs
C. Most people prefer new cars, but the high prices for new cars force most of them to buy used cars
D. Government actions to pass "lemon" laws have reduced information on used cars
A. Owners of poor-quality cars have a strong incentive to sell their cars, while owners of high-quality used cars have more incentive to keep their cars
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Which of the following statements is CORRECT?
A) When both demand and supply increase, the quantity decreases and the price might rise, fall, or remain the same. B) When both demand and supply increase, the price rises and the quantity might increase, decrease, or remain the same. C) When both demand and supply decrease, the quantity increases and the price might rise, fall, or remain the same. D) When both demand and supply decrease, the quantity decreases and the price might rise, fall, or remain the same.
Which of the following goods is rival in consumption and excludable?
a. a DVD b. a movie in an empty theater c. an outdoor movie shown at a public park d. a movie shown on cable television.