A Principles of Microeconomics professor wants to know how much prior knowledge her students have before beginning the class so she gives them a pre-test. This action is an example of
A)signaling.
B)screening.
C)adverse selection.
D)moral hazard.

Question

Quizplus · Accepted Answer

Screening is a strategy used by one party to gain information about another party. In this case, the professor is using a pre-test as a screening mechanism to assess the students' prior knowledge before the class starts.

A Principles of Microeconomics Professor Wants to Know How Much