Question

The phenomenon called moral hazard occurred frequently in the market for lemon. True or false


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Answer 1

Answer:

true

Explanation:

The name comes originally from the insurance industry. ... In insurance markets, moral hazard occurs when the behavior of the insured party changes in a way that raises costs for the insurer since the insured party no longer bears the full costs of that behavior.

The market for lemons refers to a situation where sellers are better informed than buyers about the quality of the good for sale, like used cars. The informational asymmetry—sellers know more than buyers—causes the market to collapse

Answer 2

Answer:

True ☺️

Explanation:

As above

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