Lemon Laws That Allow Consumers to Return Low-Quality Used Cars

question 107

Multiple Choice

Lemon laws that allow consumers to return low-quality used cars are designed to help solve the problem of ________ in used car markets.

• A) moral hazard
• B) thick markets
• C) experience ratings
• D) adverse selection

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Definitions:

Harm

Refers to damage or injury that affects someone or something's well-being or functionality.

Abnormally Dangerous Activity

An abnormally dangerous activity is any activity that inherently involves a high risk of harm or injury to people or property, even when all possible safety measures are taken.

Strict Liability

A legal doctrine holding an individual or entity responsible for damages or injuries caused by their actions or products, regardless of fault or intention.

Significant Risk

Refers to a risk level that is substantial enough to warrant attention or action, often used in legal, financial, and health contexts to denote risks that are not negligible or minor.