Which of the Following Statements Are Implications of the Lemons

question 6

Multiple Choice

Which of the following statements are implications of the lemons problem in the used car market? (i) many people avoid buying vehicles in this market
(ii) used cars have a market value much less than that of new cars
(iii) buyers are just as aware of a used car's defects as sellers

• A)(i) only
• B)(i) and (ii)
• C)(i) and (iii)
• D)(ii) and (iii)

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Definitions:

Indifference Curve

A graph showing different bundles of goods, each measured as to quantity, between which a consumer is indifferent.

Slope

In mathematics, the measure of the steepness or incline of a line, typically defined as the ratio of the vertical change to the horizontal change.

Utility Function

An economic concept that measures preferences over a set of goods and services, reflecting satisfaction or happiness.

Indifference Curve

A graphical representation in microeconomic theory of all possible bundles of goods between which a consumer is indifferent, showing preferences of equal utility.