ECON 200 PRACTICE QUESTIONS SIGNALING THEORY OF EDUCATION
ESTIMATED TIME TO FINISH: 15 MINUTES
1. On average, people with college diplomas have higher earnings than people without college diplomas. This is
consistent with…
A. the human-capital theory of education only.
B. the signaling theory of education only.
C. both the human-capital theory and the signaling theory of education.
D. neither the human-capital theory nor the signaling theory of education.
2. Which of the following behaviors is consistent with the human-capital theory of education?
A. A student is upset when the professor cancels a class.
B. A student is anxious on exam day but not on any other day.
C. A student attends an entire semester of classes for a course that she is not enrolled in.
D. (A) and (B) are correct.
E. (A) and (C) are correct.
3. Which of the following statements is consistent with the signaling theory of education?
A. Education is valuable because it increases your knowledge and skills.
B. Education is valuable because it separates the high-ability people from low-ability people.
C. Education is valuable because it turns low-ability people into high-ability people.
