or Lemon as it is more commonly known. When considering the market options there is possibility of purchasing a new lemon car as there is a used good car. The uncertainty that arises from the probably of purchasing a lemon due to asymmetric information can cause the buyer to have doubts about the car's quality and inherent outcome when purchased. This same dilemma exists in a multitude of markets where sellers have an incentive to not disclose information about their product if it is poor quality due to knowledge that the average standard across the industry from good products existing will boost their selling power. The asymmetrical information known about the car's quality can lead to a breakdown in the autombile industry's overall efficiency. This is due to two reasons. Firstly, uncertainty between the buyers and sellers and secondly in the broader market where only sellers with below average vehicles will be willing to sell due to the reduced quality being represented. There are two primary solutions for adverse selection; signaling and screening. Moral hazard includes a partnership between a principal and agent and occurs when the agent may change their behaviour or actions after a contract has been finalised which can cause adverse consequences for the principal. Moral hazard is present when there is a change in the agents behaviour after taking out insurance cover to protect them. For example, if someone purchased car insurance for their vehicle and afterwards held their responsibility to a lower standard by going over the speed limit for example or generally driving recklessly. The Global Financial Crisis of 2008 is another example, where Mortgage-backed securities were formed through the collation of subprime mortgages and sold to investors without disclosing the risk involved. For moral hazard, contracting between principal and agent may be describable as a second best solution where payoffs alone are observable with information asymmetry. Insurance covers will often include a waiting period clause to refrain agents from changing their attitude. Signaling Michael Spence originally proposed the idea of signaling. He proposed that in a situation with information asymmetry, it is possible for people to signal their type, thus credibly transferring information to the other party and resolving the asymmetry. This idea was originally studied in the context of looking for a job. An employer is interested in hiring a new employee who is skilled in learning. Of course, all prospective employees