Which pairing is CORRECT?
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Which pairing is CORRECT?
A.Moral hazard: used car consumers don’t know which of the used cars on the market is in good condition (peaches) and which is in bad condition (lemons).
B.Moral hazard: used car consumers offer a low expected price and for this reason, sellers of good cars (peaches) don’t sell them or offer them to sell in the market.
C.Adverse selection: used car consumers don’t know which of the used cars on the market is in good condition (peaches) and which is in bad condition (lemons).
D.Adverse selection: used car consumers offer a low expected price and for this reason, sellers of good cars (peaches) don’t sell them or offer them to sell in the market.
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