Lemon laws __________ the __________ problem in the used car market.
A)are meant to reduce; adverse selection
B)are meant to reduce; moral hazard
C)unintentionally worsen; adverse selection
D)unintentionally worsen; moral hazard

Question

Quizplus · Accepted Answer

Lemon laws are designed to protect consumers from defective used cars by mandating warranties or other remedies, thereby aiming to reduce the adverse selection problem where buyers have less information about the car's quality than sellers.

Lemon Laws __________ the __________ Problem in the Used Car

Lemon Laws the Problem in the Used Car