Because of Asymmetric Information,most Used Cars That Are Offered for Sale

question 57

Multiple Choice

Because of asymmetric information,most used cars that are offered for sale will be sold for prices that are greater than their true value.Because of this fact,the used car market falls victim to

• A)the free-rider problem.
• B)deadweight loss and economic inefficiency.
• C)a surplus of used cars.
• D)adverse selection.

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Definitions:

Biases

Prejudices or inclinations that influence one's judgments and decisions in a non-objective manner.

Theoretical Grounding

A foundational basis provided by theories or frameworks that support and explain a research study or psychological approach.

Continuum Model

An approach suggesting that certain traits or behaviors can be understood as occurring along a spectrum rather than in binary categories.

Dysfunctional

Impaired or abnormal functioning, often used in the context of families or behavior.