Adverse Selection Refers to a Situation in Which

question 46

Multiple Choice

Adverse selection refers to a situation in which

• A)employers have more information about a job's salary than the job candidate does
• B)a job candidate has more information about the job's salary than the employer does
• C)employers have more information about a job candidate's abilities than the candidate does
• D)a job candidate has more information about her abilities than the employer does
• E)only below-average job candidates apply for a job

---

Definitions:

Cognitive Competence

The ability to understand, process, and utilize information effectively.

Social Compensation

The effort to perform at a higher level in social situations where one feels inferior or has experienced rejection, in order to compensate for perceived shortcomings.

Self-Esteem

The perception that an individual has of their self-worth, shaped by their thoughts, emotions, and experiences.

Social Facilitation

The tendency for individuals to perform differently, often better, when in the presence of others than when alone, due to the perceived pressure of an audience or competition.