The SAT (Scholastic Aptitude Test) is often used as a signaling device by colleges to find high- qualified students
High scores on this test can certainly communicate a lot of other qualities about a student that may make it an efficient sorting device. However, can you think of any reason why at least occasionally a high score might not signal the correct information?
Since students are well aware that colleges and universities rely heavily on SAT scores they are likely to spend quite a bit of time, effort and money to earning high scores. In other words, since a lot of effort is expended on this one instrument it might not necessarily reflect on the overall quality of the student.
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The marginal social cost (MSC) function is the sum of the following:
a. market-level marginal abatement cost (MACmkt) + marginal cost of enforcement (MCE) b. marginal abatement cost (MAC) + marginal external cost (MEC) c. marginal abatement cost (MAC) + total social cost (TSC) d. market-level marginal abatement cost (MACmkt) + marginal external cost (MEC)
Refer to Figure 13.2. If Oliver's political views place him at the L4 position and George's political views place him at the C4 position, the winner of the election will be
A) Oliver Cousins. B) George Glass. C) The vote will end in a tie. D) It is uncertain who will win this election.
Suppose a babysitter demands payment in full before the parents go out for the night. Using the economic way of thinking, the babysitter is clearly
A) exploiting the parents. B) exploiting the children. C) selling short. D) in it only for the money.
If a corporation pays a dividend, which group receives priority in receiving the dividend?
A) bond holders B) holders of common stock C) holders of preferred stock D) dividends are evenly divided by holders of common and preferred stock