The "Lemons Model" Predicts Quality Deterioration in the Used-Car Market

question 9

Multiple Choice

The "lemons model" predicts quality deterioration in the used-car market because

• A)used cars require increasing maintenance.
• B)suppliers and demanders have different information about cars' quality.
• C)used cars are generally of a lower quality than new cars.
• D)people will usually buy new cars if they are available.

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Definitions:

Genetic Code

A set of rules used by living cells to translate information encoded within genetic material (DNA or mRNA sequences) into proteins.

Chromosomes

Thread-like structures located inside the nucleus of animal and plant cells that carry genes made of DNA.

DNA Molecule

The carrier of genetic information in cells, consisting of two long strands that coil around each other to form a double helix.

Genetic Codes

The set of rules by which information encoded in genetic material (DNA or RNA sequences) is translated into proteins by living cells.