One Consequence of the Asymmetric-Information Problem in the Used Car

question 219

Multiple Choice

One consequence of the asymmetric-information problem in the used car market, if left unresolved, is the higher probability of

• A) new cars declining in quality because of competition from used cars.
• B) a declining quality of used cars for sale in the market.
• C) a rising quality of used cars for sale in the market.
• D) used-car buyers willing to pay higher prices in the market.

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Definitions:

Quality of Life

The overall enjoyment of life and sense of well-being, measured by factors such as physical health, emotional state, level of independence, social interactions, and personal beliefs.

Adrenal Glands

Small, triangular glands located on top of each kidney that produce hormones responsible for regulating metabolism, immune system, blood pressure, and stress response.

Norepinephrine

A neurotransmitter and hormone involved in the body's fight or flight response, also playing a key role in mood regulation.

Corticosteroids

A class of steroid hormones that are produced in the adrenal cortex and are used medicinally to reduce inflammation and suppress the immune system.