When shopping for a used car on the internet, Jonathan is faced with:
A) moral hazard.
B) adverse selection.
C) poor credit.
D) financial intermediaries.

Question

Quizplus · Accepted Answer

Adverse selection refers to the situation where the quality of the product being sold is uncertain or asymmetric information exists between the buyer and seller, which can lead to the selection of low-quality used cars in online markets.

When Shopping for a Used Car on the Internet, Jonathan