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Author Question: Some companies subject their applicants to extensive tests. Why? A) to reduce the informational ... (Read 202 times)

Mr. Wonderful

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on: Jul 1, 2018
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.
Microeconomics ¦ Perloff ¦ 8th Edition
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mk6555

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Reply #1 on: Jul 1, 2018
Answer to Question 1

D

Answer to Question 2

C


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