Which Theory Is Supportive of the Idea That Increasing Educational

question 357

Multiple Choice

Which theory is supportive of the idea that increasing educational levels for all workers would raise all workers' productivity and therefore their wages?

• A)the theory of compensating differentials
• B)the efficient-market hypothesis
• C)human-capital theory
• D)signaling theory

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Definitions:

Marginal Social Cost

The additional cost imposed on society due to the production or consumption of one more unit of a good or service.

Competitive Market

A market structure characterized by a large number of buyers and sellers, free entry and exit, and a product that is homogenous across suppliers, leading to price competition and efficiency.

External Benefits

Benefits from a transaction or activity that accrue to others not directly involved in the transaction or activity.

External Costs

Costs generated by production or consumption activities that are not borne by the producer or consumer but by a third party or society at large.