Multiple Choice Quiz


1	Rates of poverty among African-Americans are _________ that of whites
		A)	lower than
		B)	roughly equal to
		C)	usually one or two percentage points higher than
		D)	much higher than


2	Family income for African-Americans is ___________ than that of whites so the ratio of African-American family income to white family income __________.
		A)	rising much faster; is nearly one (implying near equality)
		B)	rising slightly faster; has risen albeit slowly
		C)	rising at the same rate as that of whites; has stayed constant over time
		D)	falling at the same rate as that of whites; has stayed constant over time


3	If an insurance company notes that Hispanic drivers are less likely to get in an accident and when they do the accidents are less costly than those of white drivers then if the insurance companies decided to use race as a factor in setting premiums by charging whites more than Hispanics this would be
		A)	rational (or statistical) discrimination but would also be illegal.
		B)	rational (or statistical) discrimination and it legal.
		C)	logical discrimination and its legality would have to be settled in Insurance Court.
		D)	stupid because it is not consistent with profit maximization.


4	If a university uses a standardized test to decide who gets admitted and who does not and minorities have generally lower scores then this
		A)	is adverse impact discrimination and is illegal.
		B)	is adverse impact discrimination and is legal but only if the test scores predict success.
		C)	is disparate treatment discrimination and is illegal.
		D)	is disparate treatment discrimination and is legal but only if the test scores predict success.


5	Suppose the Justice Department commissioned a study to uncover discrimination in the admissions process of a university whereby all the admissions records were sent to statisticians so that they could analyze the data to see if the difference between the way whites, blacks, Hispanics and Asians could have happened by chance. This would be an example of detecting discrimination through the use of _____________ .
		A)	regression techniques
		B)	auditing techniques
		C)	nonsensical techniques
		D)	random techniques


6	Suppose the Justice Department commissioned a study to uncover discrimination against Hispanics in the admissions process of a university whereby fictitious yet academically identical applications were sent to a university with student names and high schools that were suggestive of the students' ethnic backgrounds (Martinez and Jimenez from high schools in East Los Angeles and Smith and Jones from high schools in Beverly Hills). This would be an example of detecting discrimination through the use of _____________.
		A)	regression techniques
		B)	auditing techniques
		C)	nonsensical techniques
		D)	random techniques


7	Labor market discrimination where minorities are legally bound to certain types of employment will lead to
		A)	reduced supply in the areas whites work thereby raising their wages.
		B)	increased supply in the areas minorities work thereby suppressing their wages.
		C)	increased demand in the areas minorities work because of low wages.
		D)	a) and b)


8	Many economists argued that the pay-gap that resulted from discrimination, absent a legal structure to support it, would vanish because
		A)	it is not consistent with the moral ethic.
		B)	employers would no longer have racial associations with job performance.
		C)	such discrimination is not consistent with profit maximizing.
		D)	such discrimination is against the law.


9	Economists note that discrimination will not vanish if
		A)	firms have market power and are making sustainable economic profits and choose to "spend" some of that economic profit satisfying their bigotry.
		B)	employers have customers who are bigots so that in order to maximize profits firms may feel the need to acquiesce to their customer's bigotry.
		C)	the gap in pay is substantial.
		D)	a) and b)


10	If a university with no demonstrable past of discriminatory admissions practices wants to increase its minority population it
		A)	may set a quota for minorities.
		B)	may advertise in newspapers and on radio stations with a distinctly minority audience.
		C)	may set an admissions policy where there is a minimum entrance requirement and select more minorities from the eligible group than they would have if they had ranked the students by test scores alone.
		D)	b) and c)

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