Which of the Following Examples Best Describes the Signaling Theory

question 120

Multiple Choice

Which of the following examples best describes the signaling theory of education?

• A)The hiring manager offers a job to a recent college graduate because she is more beautiful than the rest of the applicants.
• B)The hiring manager offers a job to a recent college graduate because she is expected to be more productive than other applicants due to her educational attainment.
• C)The hiring manager offers a job to a recent college graduate because the hiring manager has a bias toward people with college degrees.
• D)The hiring manager offers a job to a recent college graduate because education is correlated with natural ability.

---

Definitions:

Infant Industry

The infant industry argument supports protecting emerging domestic industries from international competition until they become competitive internationally.

Technological Efficiency

A state of production where a business cannot produce more of one good without lowering the production level of another good, given current technology.

Import Protection

Measures by a government to restrict foreign imports to protect domestic industries.

Import Quotas

Restrictions set by a country on the amount or volume of goods that can be imported into the country over a set period of time.