Which of the Following Is an Example of Signalling

question 82

Multiple Choice

Which of the following is an example of signalling?
(i) department stores buying extra advertising space before an upcoming sale
(ii) a student obtaining a university degree in philosophy
(iii) wearing specific brands and styles of clothing out on a Saturday night

• A) (i) and (i) anly
• B) (ii) and (ii) any
• C) (i) and (ii) any
• D) (i), (i) and (ii)

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Definitions:

Monopsonistic Employer

A labor market condition where a single employer significantly controls the market for workers and can dictate terms of employment.

Competitive Market

A market structure characterized by a large number of buyers and sellers where no single participant can significantly influence price.

MRP of Labor

Marginal Revenue Product of Labor; the additional revenue generated by employing one more unit of labor.

Monopsonist

A market condition where there is only one buyer for a particular product or service, giving that buyer significant power over prices.