EXPLORING ECON.-W/ACCESS (LL) >CUSTOM<
EXPLORING ECON.-W/ACCESS (LL) >CUSTOM<
7th Edition
ISBN: 9781305757448
Author: Sexton
Publisher: CENGAGE C
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Chapter 8, Problem 10P
To determine

(a)

To explain:

The reason behind wearing a suit is a weaker signal of ability than the educational achievement.

To determine

(b)

To explain:

The reason behind some majors in colleges provide more powerful signals for future employment.

To determine

(c)

To explain:

The reason behind a double majoring provides a more powerful market signal that having a single major.

To determine

(d)

To explain:

The reason for students can be said to overinvest in grades than in learning course material

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Students have asked these similar questions
Some economists maintain that the returns to additional years of education is actually quite small but that there is a substantial “sheepskin” effect whereby one receives a higher salary with the successful completion of degrees or the earning of diplomas (i.e., sheepskins).Explain how the sheepskin effect is analogous to a signaling model.
In the city of Swiftsure, there is only one crime, armed robbery. The city recently decided to double the probability of imprisonment from 10 percent (10 percent of armed robberies result in a prison sentence) to 20 percent. Because the city has a fixed prison capacity, it also cut the average prison sentence in half, from 3 years to 1.5 years.   a.     Would you expect these changes in the city’s crime policy to increase, decrease, or not affect the city’s crime rate? Explain why.               b. would you expect these changes to increase, decrease, or not affect the total cost of crime (the sum of victim and prevention costs.
Suppose there are two types of persons: high-ability and low-ability. A particular diploma costs a high-ability person $8,000 and costs a low-ability person $20,000. Firms wish to use education as a screening device where they intend to pay $25,000 to workers without a diploma and $ K to those with a diploma. In what range must K be to make this an effective screening device?
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