Mary Jo Smith Is Willing to Work for $3,200 Per

Multiple Choice

Mary Jo Smith is willing to work for $3,200 per month. She asks the HR manager at Plain Truth Advertising for $4,000 per month. While he was willing to pay $3,700 per month, he rejects her application and begins to search for a new employee again. This is an example of:

A) adverse selection.
B) value maximization.
C) bargaining failure.
D) agency incentive problems.