Frequently It Is the Case That: (1) a Worker Knows

question 23

Multiple Choice

Frequently it is the case that: (1) A worker knows more than his employer about how much effort he puts into his job, and (2) the seller of a used car knows more than the buyer about the car's condition.

• A)Neither (1) nor (2) serves as an example of asymmetric information.
• B)Both (1) and (2) serve as examples of asymmetric information.
• C)Neither (1) nor (2) serves as an example of a hidden action.
• D)Both (1) and (2) serve as examples of hidden action.

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Definitions:

High Reliability

Refers to systems or organizations operating in a manner that minimizes errors and maximizes safety and efficiency.

Inadequate Standardization

A situation where procedures, methods, or practices lack consistency or uniformity, leading to variability in outcomes or assessments.

Standardization

The process in which a test is administered to a large group of people whose performance then serves as a standard or norm against which any individual’s score can be measured.

Idiographic Information

Personalized or unique data specific to an individual's case, often used in the study of personality and individual differences.