Asked by Emily Bichler on Sep 24, 2024
Verified
For a screen to be successful,
A) High risk individuals must not be able to pose as low risk individuals
B) It must not be profitable for high risk individuals to pose as low risk individuals
C) High risk individuals should be able to pose as low risk individuals
D) None of the above
High Risk Individuals
High risk individuals are those considered more likely to encounter certain hazards or negative outcomes due to their behaviors, characteristics, or environmental factors.
Low Risk
Refers to investments or decisions that carry a minimal potential for losing value or experiencing negative outcomes.
- Discriminate between the use of mechanisms for signaling versus those for screening.
Verified Answer
AS
Areej Shawahna2 days ago
Final Answer :
B
Explanation :
In order for a screening process to be successful, it is crucial that it is not profitable for high-risk individuals to pose as low-risk individuals. This will help prevent fraudulent behavior that could compromise the accuracy of the screening process. On the other hand, allowing high-risk individuals to pose as low-risk individuals (option C) would defeat the purpose of the screening process and could lead to false negative results. Option A is also not ideal as it is difficult to completely eliminate the possibility of high-risk individuals posing as low-risk individuals. Therefore, the best option is B.
Learning Objectives
- Discriminate between the use of mechanisms for signaling versus those for screening.