In the Market for Used Cars, If There Is Asymmetric

question 12

Multiple Choice

In the market for used cars, if there is asymmetric information yet all cars sell for the same price,

• A)there is an efficiency problem and there are equity implications.
• B)there is no efficiency problem, but there are equity implications.
• C)buyers of lemons win at the expense of buyers of good cars.
• D)there is no efficiency problem and there are no equity implications.

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Definitions:

Delusions

False beliefs held with strong conviction, despite superior evidence to the contrary, often found in psychiatric conditions.

Compulsions

Repetitive behaviors or mental acts that an individual feels driven to perform in response to an obsession or according to rigid rules.

Schizophrenia

A grave psychiatric syndrome with pronounced disruptions in cognitive processing, emotional regulation, personal identity, verbal communication, perceptual experiences, and conduct.

Split Personality

A term formerly used to describe a condition in which an individual displays multiple distinct identities or personalities, now more accurately referred to as Dissociative Identity Disorder.