If All Used Cars in a Market with Symmetric Information

question 78

Multiple Choice

If all used cars in a market with symmetric information about quality are sold at the same price, then

• A)sellers of good quality cars are subsidizing sellers of lemons.
• B)buyers of good quality cars are subsidizing buyers of lemons.
• C)sellers of lemons are subsidizing sellers of good quality cars.
• D)sellers of good quality cars are subsidizing buyers of lemons.

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Definitions:

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Ceteris Paribus

A Latin phrase meaning "all other things being equal," used in economics to isolate the effect of one variable on another while holding everything else constant.

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A limit on the quantity of imports.

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The digital distribution of films over the internet, allowing users to watch content on-demand without the need for physical copies or downloads.