When Employers Use Screening to Distinguish High-Ability Workers from Sufficiently

question 59

Multiple Choice

When employers use screening to distinguish high-ability workers from sufficiently numerous low-ability workers,the burden of asymmetric information falls on _________ because they ________ than when employers are well-informed.

• A) low-ability workers; perform more tasks
• B) low-ability workers; are paid less per task
• C) high-ability workers; perform more tasks
• D) high-ability workers; are paid less per task

---

Definitions:

Gross Sales

The total sales revenue of a company without any deductions for returns, allowances, or discounts.

Cost Of Goods Sold

The immediate costs associated with manufacturing the products a company markets, including materials and workforce expenses.

Operating Cycle

The time period it takes for a company to purchase inventory, sell products, and receive cash from sales.

Merchandising Company

A business that purchases goods and resells them at a higher price, typically without modification to the products.