Why does the lemons problem result in adverse selection

Reference no: EM131335435

1. Contrast market situations with complete and asymmetric information. What is an example of a market with complete information?

2. What characteristics of a market can create the lemons problem?

3. Define adverse selection. Why does the lemons problem result in adverse selection?

4. How can warranties reduce the lemons problem in an economic market?

Reference no: EM131335435

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