In the Market for Used Cars,the Lemons Model Predicts That

question 127

Multiple Choice

In the market for used cars,the lemons model predicts that

• A)sellers will always overstate the condition of their cars.
• B)buyers will always overstate their reservation price.
• C)sellers are more likely to sell low quality than high quality cars.
• D)sellers will always understate the condition of their cars.

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Definitions:

Contingent

Depending on something else in the future to happen, often used to describe conditions or stipulations.

Co-occurred

Refers to events or phenomena that happen at the same time or in conjunction with each other.

Generalization Behavior

The process by which an organism makes a response to a stimulus that is similar to, but not identical to, a previously encountered stimulus.

Operant Box

An experimental apparatus used in behavioral psychology to study the learning behavior of animals, particularly through reinforcement and punishment.