If Buyers Cannot Assess the Quality of Used Cars and There

question 59

Multiple Choice

If buyers cannot assess the quality of used cars and there are no warranties,

• A) only lemons are sold.
• B) only good used cars are sold.
• C) good cars are sold at a higher price than bad cars.
• D) there is no adverse selection problem.
• E) lemons and good cars sell for the same price.

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Definitions:

Biogeochemical Cycle

Process by which matter cycles from the living world to the nonliving, physical environment and back again (e.g., the carbon cycle, the nitrogen cycle, and the phosphorus cycle).

Photochemical Smog

A type of air pollution created by the reaction of sunlight with pollutants such as nitrogen oxides and volatile organic compounds in the atmosphere.

Carbon Cycle

The biogeochemical cycle by which carbon is exchanged among the biosphere, pedosphere, geosphere, hydrosphere, and atmosphere of the Earth.

Respiration

The metabolic processes by which an organism obtains energy (in the form of ATP) by absorbing oxygen and releasing waste products.