When Employers Sort Employment Applications into High-Ability and Low-Ability People

question 81

Multiple Choice

When employers sort employment applications into high-ability and low-ability people based on the attainment of a college degree (irrespective of major) ,they are providing evidence in support of the

• A) human-capital theory of education.
• B) signaling theory of education.
• C) principle that education reduces marginal productivity.
• D) principle that most business owners are more interested in discriminating against a particular group than in maximizing profits.

---

Definitions:

Period Costs

Expenses that are not directly associated with the production process and are expensed in the period they are incurred.

Financial Reporting

The process of producing statements that disclose an organization's financial status to management, investors, and regulators.

Direct Manufacturing Cost

Expenses that are directly attributable to the production of goods, including materials and labor directly involved in the manufacture.

Period Costs

Expenses that are not directly tied to the production process and are instead charged to the period in which they are incurred.