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Imagine a consumer shopping for a used car is worried about getting stuck with a lemon (a poor quality car). The consumer finds two cars
Imagine a consumer shopping for a used car is worried about getting stuck with a lemon (a poor quality car). The consumer finds two cars that appear very similar. One car costs just about what the consumer expects this type of car to cost, while the other car costs only half as much. Briefly explain the problem confronting this consumer. Give an example of another market where similar problems arise. Describe the concept of moral hazard. Describe the concept of adverse selection
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