The Market for Lemons Essay
The Market for “Lemons”: Quality Uncertainty and the Market Mechanism by George A. Akerlof was published by the Oxford University Press in The Quarterly Journal of Economics in 1970. It discusses information asymmetry, which occurs when the seller knows more about a product than the buyer. Akerlof explains the problem of quality uncertainty with an example of the market for used cars. A used car is a car that has had one or more registered owners and has inevitable wear and tear. There are good used cars and bad used cars (lemons). A lemon is an American term for a car that is found to be defective only after it is bought. Used cars that are defective are called lemons, and most defects are …show more content…
IV Response to Question 2 The lemons problem results from asymmetric information in which buyers aren’t privileged to the same information that sellers are. In order to remedy this, trust has to be created between the buyer and the seller. Akerlof gives several examples in the article, one being guarantees. The buyer is expecting a normal quality, and the seller has to guarantee that the buyer is going to get it. It costs a lot more to guarantee a lemon than a good product. A second example is brand-names. Brand names not only indicate quality but also give the consumer a means of retaliation if the quality does not meet expectations, for the consumer will then curtail future purchases (p. 500). V Conclusion By creating guarantees and trust in brand-name products, the market can exist due to buyers and sellers finding a balance. Trust is important whenever there is a situation where asymmetric information is present. Without it, markets would not exist in the world due to not being able to tell a good product from a
-
The Feasibility of Lemon Grass Extract as Anti-Oxidant (Not Mine)
1444 Words | 6 PagesThe fesibility of Lemon Grass Extract as Anti-oxidant Abstract This research aims to determine the ideal amount of quality effect for using anti – oxidant by getting the extract of lemon grass. The lemon grasses were chopped at the constant size and pressured afterwards and were tested for their physical appearance and effeitinity. After the preliminary test in finding out the best insulator for the making of anti – oxidant out of extract lemon grass. 46 people were tested in different conditions…
-
Orange and Lemon Can Produce Electricity Chemistry Research Work
2585 Words | 11 PagesA Investigatory Project submitted in partial fulfillment of the requirements for Chemistry 9, Fourth Quarter Orange and Lemon Can Produce Electricity Submitted by: Submitted to: Chemistry Teacher Date: Table of Content I. Acknowledgement _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ p. II. Abstract _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ p. III. Introduction _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ p. IV. Chapter 1: Problem and It’s Background * a. Objectives…
-
Essay on the significance of the lemon law act
1357 Words | 6 Pagesaffordable car. But, one should not worry. There is a solution to all these annoying questions one just does not know how to answer. This is how the Magnuson –Moss warranty act comes into this situation. The “lemon law” is a subdivision of this act. The Magnuson-Moss warranty act, when tied with the ‘lemon law,’ helps a person of the purchased new car, ensure that they will have the rights to have a properly functioning car. The following will explain what exactly this law is and how it is applied to the…
-
Lemon Max
1571 Words | 7 PagesMarket Analysis Dishwash market of Pakistan is a bar driven market. Vim’s major competitor is Max while the rest of the brands like Safoon, Anna Bar are very small in size. Price Price is very important for this category. In order to market share, competitors use price as a unique selling point (USP). Max is a price leader in dish wash market. Max and Vim are price tag parity and both are price premium. Vim is low grammage and high price although it is not a noticeable difference. Price comparison…
-
Thesis: Lemon Battery Making
2784 Words | 12 PagesLEMON BATTERY: A PRACTICAL ALTERNATIVE Thesis Statement: Lemon is a kind of voltaic battery that contains citric acid that could generate LED; digital clocks; calculators; small devices and among others sufficiently like ordinary batteries, economically. OUTLINE: I. Basic Information About Lemon Battery A. What Is Battery? B. Definition Of Lemon C. History Of Lemon D. History Of Lemon Battery E. Definition Of Lemon Battery F. Lemon Battery…
-
lagundi lemon candy
4583 Words | 19 PagesLAGUNDI LEMON CANDY A Thesis Proposal presented to the Faculty of the College of Hospitality Management Eulogio “Amang” Rodriguez Institute of Science and Technology In Partial fulfillment Of the requirements for the Subject CA 105 Leading to the Degree of Bachelor of Science in Hospitality Management Major in Culinary Arts CHAPTER 1 The Problem and Its Background Introduction Candy came to America in the early eighteenth century from Britain and France. Only a few of the early colonists were…
-
Effectiveness of Lemon Grass (Cymbopogon Marginatus) as an Ingredient of a Insect Repellent Fabric Conditioner
2371 Words | 10 PagesCebu City National Science High School Salvador St., Labangon Cebu City Effectiveness of Lemon Grass (Cymbopogon marginatus) as an ingredient of a insect repellent fabric conditioner In partial fulfillment of the course Integrative Biology Submitted by: Homecillo, Danielle S. Calumpang, Claire R. Pleños, Claire Y. Submitted to: Mrs. Alita Labiaga Abstract Insect repellents are essentially needed these days. The frequent occurrences of floods nowadays lead to the increasing cases of Dengue…
-
Alex La Guma's The Lemon Orchard Essay
5297 Words | 22 PagesStable Meaning, the Perversion of Nature, and Discursive Communities in Alex La Guma's "The Lemon Orchard" South African writer Alex La Guma was an active member of his country's non-white liberation movement. One of the 156 people accused in the Treason Trial of 1956, La Guma wrote his first book, A Walk in the Night and Other Stories, in 1962 (Wade 15). "The Lemon Orchard," a story which appeared in this debut work, is a gripping piece about the horror and cruelty of racism. In the story…
-
The Market for Lemons Essay
598 Words | 3 PagesI & II Introduction and Article Summary The Market for “Lemons”: Quality Uncertainty and the Market Mechanism by George A. Akerlof was published by the Oxford University Press in The Quarterly Journal of Economics in 1970. It discusses information asymmetry, which occurs when the seller knows more about a product than the buyer. Akerlof explains the problem of quality uncertainty with an example of the market for used cars. A used car is a car that has had one or more registered owners and has inevitable…
-
All About Lemon Trees
551 Words | 2 PagesThe Lemon tree is native to Asia and is a small evergreen. Its fruit is used for many things, culinary and non-culinary. It is mainly known for and used for its juice. Its juice is citric and very sour which is why lemonade is sour. No one knows for sure where the Lemon tree originated but it is thought that lemons first grew in northern India. Lemon trees weren’t introduced to the U.S. until about 1751 when they were planted in California. Heavy cultivation didn’t start in U.S. until about 1870…
More about The Market for Lemons Essay
-
The Feasibility of Lemon Grass Extract as Anti-Oxidant (Not Mine)
1444 Words | 6 Pages -
Orange and Lemon Can Produce Electricity Chemistry Research Work
2585 Words | 11 Pages -
Essay on the significance of the lemon law act
1357 Words | 6 Pages -
Lemon Max
1571 Words | 7 Pages -
Thesis: Lemon Battery Making
2784 Words | 12 Pages -
lagundi lemon candy
4583 Words | 19 Pages -
Effectiveness of Lemon Grass (Cymbopogon Marginatus) as an Ingredient of a Insect Repellent Fabric Conditioner
2371 Words | 10 Pages -
Alex La Guma's The Lemon Orchard Essay
5297 Words | 22 Pages -
The Market for Lemons Essay
598 Words | 3 Pages -
All About Lemon Trees
551 Words | 2 Pages