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In the Used Car Market with No Warranties,the Market for Lemons

Question 1

Multiple Choice

In the used car market with no warranties,the market for lemons (poor quality used cars) is ________ and the market for good cars is ________.


A) efficient; efficient
B) inefficient because of oversupply; inefficient because of undersupply
C) inefficient because of oversupply; inefficient because of oversupply
D) efficient; inefficient because of undersupply
E) inefficient because of oversupply; efficient

Correct Answer:

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