Author Question: The SAT (Scholastic Aptitude Test) is often used as a signaling device by colleges to find high- ... (Read 131 times)

Beheh · **on:** Jun 29, 2018

The SAT (Scholastic Aptitude Test) is often used as a signaling device by colleges to find high- qualified students.

High scores on this test can certainly communicate a lot of other qualities about a student that may make it an efficient sorting device. However, can you think of any reason why at least occasionally a high score might not signal the correct information?

Question 2

Many Americans are selling their used cars and buying new fuel-efficient hybrids. Other things remaining the same, in the market for used cars, ________ and in the market for hybrids ________.

A. supply increases and the price falls; demand increases and the price rises
B. demand decreases and the price rises; supply increases and the price falls
C. both demand and supply decrease and the price might rise, fall, or not change; demand increases and the price rises
D. demand decreases, supply increases, and the price falls; supply in-creases and the price falls

leahm14 · **Reply #1 on:** Jun 29, 2018

Answer to Question 1

Since students are well aware that colleges and universities rely heavily on SAT scores they are likely to spend quite a bit of time, effort and money to earning high scores. In other words, since a lot of effort is expended on this one instrument it might not necessarily reflect on the overall quality of the student.

Answer to Question 2

A Selling their used cars increases the supply of used cars. Buy-ing new hybrids increases the demand for hybrids.