The "lemons model" predicts quality deterioration in the used-car market because
a. used cars require increasing maintenance.
b. suppliers and demanders have different information about cars' quality.
c. used cars are generally of a lower quality than new cars.
d. people will usually buy new cars if they are available.
b
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What are law-making lags? What effect do they have on the use of discretionary fiscal policy?
What will be an ideal response?
Monopolistic competition is characterized by: a. one firm selling several products
b. many firms selling the same product. c. many firms selling slightly different products. d. one firm selling one product.
A die is rolled. If it lands 1 or 2, the person receives $90. If it 3 or 4, the person receives $30.00. If it lands 5 or 6, the person receives $60. If the person is willing to pay $60 to take this gamble, they must be
a. risk-averse. b. risk-neutral. c. risk-preferring. d. either risk-neutral or risk-preferring (not risk-averse).
Germany placed a limit on the amount of beer that can be imported into Germany. This is an example of
A. a tariff. B. dumping. C. a quota. D. an export subsidy.