Microeconomics: Principles, Applications, and Tools (8th Edition)

Published by Prentice Hall
ISBN 10: 0-13294-886-9
ISBN 13: 978-0-13294-886-9

Chapter 14 - Imperfect Information: Adverse Selection and Moral Hazard - Exercises - 14.2 Responding to the Lemons Problem - Page 334: 2.2

Answer

plums lemons

Work Step by Step

If a product is a plum, the seller will be more willing to provide a money-back guarantee. For lemons, the seller will be less willing. So we have: A money-back guarantee will be provided by the owners of $\textbf{plums}$, but not by the owners of $\textbf{lemons}$.
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