Consider the following statements about the signaling hypothesis of education:
A. The signaling hypothesis of education is based on the idea that college graduates are more productive than non-college graduates.
B. The signaling hypothesis of education suggests that firms rely on human capital requirements to ensure worker quality.
C. Employers rely on certain signals, such as a college diploma to gauge a potential employee's abilities because it could lower the cost of acquiring information about the person that is not easily observed.
Which of the statements above is true about the signaling hypothesis of education?
Answer: B & C.
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The economic way of thinking assumes people, including Mother Teresa, Jack the Ripper, Henry VIII, and Hilary Rodham Clinton, act on the basis of
A) greed. B) altruism. C) terror. D) the projects they are interested in.
Which of the following CORRECTLY describes how price adjustments eliminate a shortage?
A) As the price rises, the quantity demanded decreases while the quantity supplied increases. B) As the price rises, the quantity demanded increases while the quantity supplied decreases. C) As the price falls, the quantity demanded decreases while the quantity supplied increases. D) As the price falls, the quantity demanded increases while the quantity supplied decreases.
Refer to Table 2-4. Which of the following statements is true?
A) George has an absolute advantage in both tasks. B) Jack has an absolute advantage in both tasks. C) Jack has an absolute advantage in lawn mowing and George in garden cultivating. D) Jack has an absolute advantage in garden cultivating and George in lawn mowing.
Which of the following statements regarding the Lorenz curve is FALSE?
A) A Lorenz curve is a geometric representation of the distribution of income. B) A Lorenz curve that is perfectly straight represents complete income equality. C) The less bowed is a Lorenz curve, the less equally income is distributed. D) The more bowed is a Lorenz curve, the more unequally income is distributed.