The Used Car Market May Be Inefficient Because the Purchase

question 31

Multiple Choice

The used car market may be inefficient because the purchase of a used car often involves

• A)natural selection
• B)moral hazard
• C)hidden actions
• D)open-access resources
• E)hidden characteristics

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Definitions:

Random Variable

A random variable is a variable whose values depend on outcomes of a random phenomenon.

Manufacturer

An entity or company that makes goods for sale through the process of manufacturing.

Net Income

The amount of profit that remains after all operating expenses, taxes, and interest have been deducted from total revenue.

Random Variable

A variable that can take on different values randomly, subject to a certain probability distribution.