In the Used Car Market Without Warranties, Adverse Selection Results

question 133

Multiple Choice

In the used car market without warranties, adverse selection results in

• A) sellers of "lemons" claiming that their car is a lemon.
• B) only lemons being available for sale.
• C) the market price of used cars equal to that of good used cars.
• D) all of the above.

---

Definitions:

Long-term Memory

The aspect of our memory system that is responsible for the storage of information over long periods of time, potentially lasting from minutes to a lifetime.

Bahrick

Refers to Harry P. Bahrick, a psychologist known for his research on memory, including long-term memory and retention.

Retention

The ability to maintain or keep information in the mind over a period of time.

Ebbinghaus

Ebbinghaus refers to Hermann Ebbinghaus, a psychologist known for his foundational work on memory and the forgetting curve.