The Time Spent by Students in College

question 397

Multiple Choice

The time spent by students in college

• A)leads to lower lifetime earnings because opportunity costs are high.
• B)is an investment in human capital.
• C)decreases human capital by lowering work experience.
• D)increases as the wages paid to low-skilled workers rise.

---

Definitions:

Signal

An action or indicator that conveys information to market participants or other parties, often influencing decisions or behaviors.

Principal-Agent Relationship

A situation in which one party (the principal) grants another party (the agent) the authority to act on their behalf, often subject to a contract.

Shareholders

Individuals or institutions that own shares in a corporation, giving them a stake in the company's ownership and profits.

Adverse Selection Problem

A situation where asymmetric information leads to the selection of poor-quality goods or candidates, as the chooser lacks information to make an optimal decision.