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A Person Buying a Used Car Could Ask the Seller

Question 141

Multiple Choice

A person buying a used car could ask the seller for permission to take the car to a mechanic for an inspection. If the seller says no, the prospective buyer has gained information about the car. This process is known as:


A) screening.
B) signaling.
C) licensing.
D) internalizing the externality.

Correct Answer:

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