Which one of the following is true of a market for used cars?
A. A consumer typically overestimates the probability of getting a lemon (low-quality car).
B. As buyers become more pessimistic about their chances of buying a high-quality car, the price of used cars (both low-quality and high-quality) decreases.
C. There is a public information problem.
D. The willingness to pay is less than the willingness to accept.
Answer: B
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If foreigners held U.S. assets worth $200 billion during a certain year and the value of the current account for that year was -$189 billion, the total volume of foreign assets held domestically was worth ________
A) $101 billion B) $389 billion C) $421 billion D) $211 billion
Suppose the AD and SAS curves shift upward by the same amount. Real GDP would ________ while the price level ________
A) remain unchanged, rises B) remain unchanged, remains unchanged C) remain unchanged, falls D) rise, remain unchanged E) fall, rises