Problem
Did G.M. sell 6,800 lemons to people who bought the pickups? If G.M. did, what was the private information that it had that buyers did not know? If G.M. didn't, explain why not. Use the following information to work Problems 4 and 5.
1. Is there a moral hazard problem in a transaction between Mary and an insurance company? Explain why or why not?
2. Is there an adverse selection problem in a transaction between Mary and an insurance company? Explain why or why not?
The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.