John and Jack Are Both Trying to Sell a Used

question 134

Multiple Choice

John and Jack are both trying to sell a used car to Jim. John's car is a lemon, a car that has a serious but nonobvious problem. Jack's car is a cherry, a car that has no problems. Jim cannot tell the difference between the cars. Economists say this information problem might be solved with signaling. Who has an incentive to find a way to signal quality?

• A) Both Jack and John
• B) Jack but not John
• C) John but not Jack
• D) Jim

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Definitions:

Organizational Role Models

Individuals within an organization whose behaviors, attitudes, and ethical standards are emulated by others.

Benchmarking

The process of comparing business processes and performance metrics to industry bests and best practices from other companies.

Ongoing Activities

Refers to tasks, projects, or operations that are currently in progress or continuously occurring.

Monitoring And Adjusting

The process of tracking progress and making necessary changes to ensure the successful completion of a plan or project.