Adverse selection can arise in employment situations if information about worker quality is:
A)better for employees than employers.
B)better for employers than employees.
C)perfect.
D)available at a low enough cost.

Question

Quizplus · Accepted Answer

Adverse selection occurs when one party in a transaction has more or better information than the other party. In the context of employment, if employees have more information about their own quality than employers do, it can lead to adverse selection, where employers may end up hiring lower-quality workers because they cannot accurately distinguish between high-quality and low-quality workers.

Adverse Selection Can Arise in Employment Situations If Information About