Chapter Checkpoint

Study Plan Problems and Applications

  1. Judy knows that her car is a lemon and offers it for sale. If the used-car market is working efficiently, will buyers know whether her car is a lemon? Why or why not?

  2. Some car dealers offer used cars for sale with warranties and some offer them without warranties. Describe the equilibrium in the market for used cars. Is the market efficient?

  3. Stalling complaints about fixed GM cars

    In 2014, GM recalled 2.6 million vehicles to repair a safety defect in their ignition switches. Some of the recalled ...

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