Some companies subject their applicants to extensive tests. Why? ...

[Mr. Wonderful]

Some companies subject their applicants to extensive tests. Why?
 
  A) to reduce the informational asymmetry between the firm and the applicant
  B) to screen the applicant to avoid the problem of adverse selection
  C) to gather more information about the applicant
  D) All of the above.

Question 2

Life insurance companies often give applicants a physical examination to prevent
 
  A) the person from dying before obtaining the policy.
  B) signaling.
  C) adverse selection.
  D) profit maximization.

[mk6555]

Answer to Question 1

D

Answer to Question 2

C