Consider the Following Statements About the Signaling Hypothesis of Education

question 17

Multiple Choice

Consider the following statements about the signaling hypothesis of education:
a) The signaling hypothesis of education is based on the idea that attending university or college makes people more productive.
b) The signaling hypothesis of education suggests that firms rely on human capital requirements to ensure worker quality.
c) Employers rely on certain signals, such as a college diploma, to gauge a potential employee's abilities because it could lower the cost of acquiring information about the person that is not easily observed.
Which of the statements above is true about the signaling hypothesis of education?

• A)a and b only
• B)b and c only
• C)a and c only
• D)a, b, and c

---

Definitions:

Transfer Price

The price at which divisions of a company transact with each other for goods or services.

Valve Division

A specialized business unit within a company that focuses on the production and sales of valve products.

Outside Customers

Individuals or entities that purchase a company's products or services but are not part of the company itself.

Maintenance Department

A segment within a company responsible for the upkeep and repair of equipment, ensuring that operations run smoothly and efficiently.