An employer has narrowed a list of applicants down to two individuals. The two candidates look nearly identical on paper, but one of them has earned a four-year college degree. The employer decides to offer employment to the college graduate. What does this example illustrate?(1 point)

Question

Responses

the income effect
the income effect

the learning effect
the learning effect

the substitution effect
the substitution effect

the screening effect

Answer 1

This example illustrates the screening effect. The employer uses the college degree as a signal or screening mechanism to distinguish between the candidates, assuming that the degree indicates certain qualities or skills that may be beneficial for the job.