) In the market for second hand cars, when the phenomenon of 'adverse selection' occurs this normally refers to the fact that (a) second hand cars are by definition worse than new cars. (b) only relatively poor people want to buy second hand cars. (c) sellers of relatively good cars withdraw from the market . (d) None of the above.
) In the market for second hand cars, when the phenomenon of 'adverse selection' occurs this normally refers to the fact that (a) second hand cars are by definition worse than new cars. (b) only relatively poor people want to buy second hand cars. (c) sellers of relatively good cars withdraw from the market . (d) None of the above.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Question
1) In the market for second hand cars, when the phenomenon of 'adverse selection'
occurs this normally refers to the fact that
(a) second hand cars are by definition worse than new cars.
(b) only relatively poor people want to buy second hand cars.
(c) sellers of relatively good cars withdraw from the market .
(d) None of the above.
2)
(a) supply is perfectly inelastic.
(b) supply is perfectly elastic .
(c) demand is perfectly inelastic.
(d) demand is perfectly elastic.
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