The "lemons problem" is a term used to describe the ________.
A) moral hazard problem
B) adverse selection problem
C) free-rider problem
D) the diversification problem

Question

Quizplus · Accepted Answer

The "lemons problem" is a type of adverse selection problem in which buyers cannot determine the true quality of a product. This problem is often encountered in the used car market, where buyers cannot always tell if a car is in good condition or if it has hidden problems.

The "Lemons Problem" Is a Term Used to Describe the ________