Owners of Defective Used Cars Have More Information About the Condition

question 174

Multiple Choice

Owners of defective used cars have more information about the condition of their vehicles than potential buyers of those used cars. This is an example of

• A) the moral hazard problem.
• B) a spillover cost.
• C) a positive externality.
• D) asymmetric information.

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Definitions:

Pre-Coded

Pertains to data or information that has been prearranged in a specific format or scheme to facilitate processing or analysis.

Ambiguities

Situations or statements that are unclear or have multiple interpretations.

Subgoaling

A strategy in problem-solving that involves breaking down a goal into smaller, more manageable goals to make the task more attainable.

Algorithms

A set of rules or steps to solve a problem or perform a task, often used in computing for data processing and mathematical calculations.