Which of the Following Is a Possible Market Solution to the Lemons

question 305

Multiple Choice

Which of the following is a possible market solution to the lemons problem?

• A) Producers might offer product guarantees and warranties.
• B) Producers might be required to meet certain legal standards to obtain licenses granting the right to sell their products.
• C) Government agencies might be charged with directly overseeing production and distribution of certain products.
• D) Liability laws might be established to ensure that firms selling certain products must face penalties in the event the products function poorly.

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Definitions:

Self-reliant

The ability to depend on oneself for needs and decision-making without relying excessively on external support.

Authoritative Parents

A parenting style characterized by high expectations of maturity and communication with the child, along with a strong, nurturing, and supportive environment.

Positive Self-image

An individual's subjective view of themselves that is constructive and optimistic, contributing to confidence and self-esteem.

Authoritative

Having or showing the confident quality of someone who is respected or obeyed by other people; often related to an authoritative source of information.