MICROECONOMICS
MICROECONOMICS
11th Edition
ISBN: 9781266686764
Author: Colander
Publisher: MCG
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Chapter 8, Problem 14QE
To determine

Examples of signaling.

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One method of solving this problem is through signaling. Signaling is a strategy one uses when they have information. The goal is to use a signal to convince the buyer that the good or service that is being sold is quality and will meet the buyer's wants.  Offer an example of a company that uses a signal to help sell its product. What is the signal? What information is the signal trying to convey? Do you think the signal is effective? Why or why not? Does this signal improve market efficiency? Why or why not?
Show how education can signal the worker’s innate ability in the labor market. What is a pooled equilibrium? What is a perfectly separating signaling equilibrium?
Why do you think there is a need to use communication strategies?

Chapter 8 Solutions

MICROECONOMICS

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