In the Used Car Market with No Warranties,the Equilibrium Is

question 62

Multiple Choice

In the used car market with no warranties,the equilibrium is a ________ and there is ________.

• A) pooling equilibrium; inefficiency, partly because of oversupply of good cars
• B) pooling equilibrium; inefficiency, partly because of oversupply of lemons
• C) separating equilibrium; no inefficiency
• D) separating equilibrium; inefficiency, partly because of oversupply of lemons
• E) pooling equilibrium; no inefficiency

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Definitions:

Chinese Currency

The official currency of China, known as the Renminbi (RMB) or commonly referred to as the Yuan (CNY).

Scrap Metal

Discarded metal suitable for reprocessing or recycling.

Pharmaceutical

Pertaining to the research, development, and manufacture of drugs and medications.

Stock

A claim to partial ownership in a firm.