Adverse Selection in Employment Is More Likely When

question 103

Multiple Choice

Adverse selection in employment is more likely when

• A) jobs require specific training.
• B) everyone is equally qualified for the job.
• C) people's abilities are easy to measure.
• D) people's abilities are difficult for potential employers to observe.

---

Definitions:

Utility Function

A mathematical representation that ranks an individual's preferences for different bundles of goods or outcomes, based on the level of satisfaction or utility they provide.

Consumption

The act of utilizing goods and services to satisfy needs or desires.

Total Cost

The sum of fixed and variable costs incurred by a firm in the production of goods or services.

Price of Cheese

The cost at which cheese is sold, which can vary based on factors like type, quality, demand, and geographical location.