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A Seller's Verbal Assurances That a Used Car Is a Plum

Question 135

Multiple Choice

A seller's verbal assurances that a used car is a plum (high-quality car)


A) is not effective at reducing the problems associated with asymmetric information.
B) is an effective way for sellers to prove that the good they are selling is of high quality.
C) is a more efficient way to prove high quality than a money-back guarantee because it does not cost the seller any money to make the assurance.
D) provides the same protection against adverse selection than does a repair guarantee.

Correct Answer:

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