1. According to the signaling theory of education,
a. schooling sends signals to employers in much the same way that advertising sends signals to consumers.
b. education is less important than natural ability.
c. a person becomes more productive by earning a college degree.
d. All of the above are correct.
2. The theory of efficiency wages suggests that firms may pay above-equilibrium wages
a. to reduce employee turnover.
b. to prevent unions from recruiting members.
c. to increase the demand for better-skilled workers.
d. to reduce the need for minimum wage laws.