Question 1

In the signaling theory of education, (i)	schooling makes workers more productive in the short-run.
(ii)	schooling makes workers more productive in the long-run.
(iii)	the worker signals to the employer that he is a valuable employee because he was willing to spend time to get an education.

Accepted Answer

Signaling theory suggests that education serves as a signal to employers of a worker's potential productivity, rather than necessarily increasing productivity itself.

Question 2

Which theory is supportive of the idea that increasing educational levels for all workers would raise all workers' productivity and therefore their wages?

Accepted Answer

Human-capital theory asserts that education and training are investments in a person's skills and knowledge that can lead to higher productivity and earnings. Therefore, increasing educational levels for all workers would increase their human capital and raise their productivity and wages.

Question 3

A signaling theory of education suggests that

Accepted Answer

The answer of A signaling theory of education suggests that
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Question 4

Which of the following theories would suggest that attending school does not improve productivity but that high-ability people are more likely to stay in school?

Accepted Answer

Signaling theory suggests that the main purpose of education is to signal one's abilities to potential employers, rather than actually improving productivity. This theory argues that high-ability individuals are more likely to complete more years of schooling not because the education has increased their productivity, but because their existing ability was signaled by their degree attainment.

Question 5

According to the human-capital view,education

Accepted Answer

The human-capital view suggests that education enhances productivity by increasing individuals' skills and knowledge, which results in higher earnings. Therefore, choice C is the correct option. Choice A is incorrect because education has been shown to have a positive impact on lifetime earnings. Choice B is incorrect because work ethic is not necessarily dependent on education. Choice D is also incorrect because while education may be an indicator of some natural ability, it is not the only factor that determines natural ability.

Question 6

According to the signaling theory of education,

Accepted Answer

According to the signaling theory of education, schooling serves as a signal to employers just as advertising signals to consumers. That is, education signals to employers that the student has desirable characteristics such as intelligence, work ethic, and conformity to societal norms. It does not necessarily mean that the person is more productive or that natural ability is less important.

Question 7

Suppose that the country of Libraria made a concerted effort to increase the educational level of its people.If this effort had no effect on the wages of its workers,one might consider this as evidence in support of

Accepted Answer

If increasing the educational level of the population has no effect on wages, it suggests that education is not increasing productivity or human capital. Instead, it supports the signaling view of education, which suggests that education primarily serves as a signal to employers about an individual's abilities and work ethic.

Question 8

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

Accepted Answer

The sorting of employment applications based solely on the attainment of a college degree supports signaling theory of education, which suggests that education functions as a signal to employers about the potential abilities and skills of a candidate. Employers assume that candidates with a degree have acquired skills and knowledge that will make them more productive, even if the specific major is not relevant to the job. This theory implies that employers are less interested in the specific content of education and more in the fact that it signals a candidate's potential abilities.

Question 9

Which of the following theories explains why increased education translates into higher wages? (i)	human-capital theory
(ii)	the theory of compensating differentials
(iii)	signaling theory

Accepted Answer

Human-capital theory suggests that education increases a worker's productivity, leading to higher wages. Signaling theory posits that education serves as a signal to employers of a worker's ability, also resulting in higher wages. The theory of compensating differentials is unrelated to education and wages.

Question 10

The human capital theory explanation for why people invest in education has been challenged by a theory that suggests

Accepted Answer

The theory that suggests schooling acts as a signal of ability is known as the signaling theory, which challenges the human capital theory explanation for why people invest in education. According to the signaling theory, education serves as a way for individuals to signal their abilities to potential employers, rather than just increasing their skills and productivity.

Question 11

A signaling theory of education suggests that educational attainment

Accepted Answer

A signaling theory of education suggests that individuals will invest in education not solely for the purpose of acquiring skills and knowledge, but also as a means of signaling their abilities to potential employers. In this framework, educational attainment serves as a signal of high marginal productivity, indicating to employers that an individual possesses particular skills and abilities that would make them a valuable employee. Additionally, the theory acknowledges that there is a correlation between natural ability and educational attainment, as those individuals with higher natural ability may be better equipped to successfully complete higher levels of education. Therefore, both options A and B are correct. The theory does not suggest that education necessarily increases the productivity of low-ability workers, so option C is incorrect.

Question 12

Which theory would support the idea that education does not enhance productivity and therefore raising all workers' educational levels would not affect wages?

Accepted Answer

Signaling theory suggests that education does not necessarily enhance productivity, but rather it signals to employers that an individual possesses certain qualities or skills. Therefore, raising all workers' educational levels would not necessarily lead to an increase in wages.

Question 13

According to the signaling theory of education,better-educated workers (i)	signal their higher marginal productivities.
(ii)	are likely to be high-ability workers.
(iii)	are in scarce supply in less developed countries.

Accepted Answer

According to the signaling theory of education, better-educated workers signal their higher marginal productivity to potential employers. This means that they can contribute more to the company and are therefore more valuable to hire. Additionally, better-educated workers are likely to be high-ability workers, as they have demonstrated the ability to acquire and apply knowledge and skills effectively. However, the signaling theory of education does not necessarily suggest that better-educated workers are in scarce supply in less developed countries, so option (iii) is not correct.

Question 14

Of the theories listed below,which do the best job of explaining why educated people are paid more than uneducated people?

Accepted Answer

The human-capital theory suggests that education and skill acquisition increase an individual's productivity and earning potential. However, the signaling theory argues that education serves as a signal to employers of an individual's ability and work ethic. Therefore, educated individuals are not just worth more to employers because of their skill set, but also because education serves as a signal of their abilities.

Question 15

A college degree makes a person more productive according to

Accepted Answer

The answer of A college degree makes a person more...

Question 16

Which of the following statements accurately explains the superstar phenomenon in wages?

Accepted Answer

The superstar phenomenon in wages occurs in industries where technology allows delivery to a large audience, such as sports and entertainment. The most talented individuals in these industries can earn exponentially more than their peers due to the high demand and ability to reach a large audience. This phenomenon does not occur in industries where services are not easily scalable or where quality is not easily discernible, such as carpentry or comedy.

Question 17

Which of the following statements represents the idea behind signaling in education?

Accepted Answer

The answer of Which of the following statements represents the...

Question 18

Both Jake and Bill are police officers.Jake is a patrolman,and Bill is a detective.Jake's job is inherently more dangerous than Bill's.Bill has passed a difficult exam in order to be promoted to detective.Bill earns more than Jake.This is likely because

Accepted Answer

Bill earns more because he has more human capital, which includes his experience, skills, and the fact that he passed a difficult exam to become a detective.

Question 19

Which of the following statements is correct?

Accepted Answer

The human-capital theory of education suggests that education increases an individual's productivity and therefore could be called a productivity-enhancing theory. On the other hand, the signaling theory of education suggests that education is used as a signal or indicator of an individual's productivity rather than directly enhancing it, and therefore could be called a productivity-revealing theory. Neither of these theories have been fully disproved or proven, but there is some evidence to support both. Therefore, option D is the correct statement as both a and b are correct.

Question 20

In the signaling theory of education, (i)	schooling itself does not lead to more productive workers.
(ii)	the worker signals to the employer that he is a valuable employee because he was willing to spend time to get an education.
(iii)	schooling enhances worker productivity.

Accepted Answer

Signaling theory suggests that education serves as a signal to employers of a worker's potential productivity, not that it directly increases productivity.

Quiz 19: Earnings and Discrimination

In the signaling theory of education, (i) schooling makes workers more productive in the short-run. (ii) schooling makes workers more productive in the long-run. (iii) the worker signals to the employer that he is a valuable employee because he was willing to spend time to get an education.