Question 1

If, in the experience of a manager of a large company who hires for hundreds of positions per year, whites are more likely than blacks to leave within a year, then a manager who hires only blacks to save money is

Accepted Answer

The answer of If, in the experience of a manager...

Question 2

Using supply and demand to model employment discrimination, if blacks are legally confined to certain professions then the wage paid to whites in other professions will be ______ and the wage paid to blacks will be ______.

Accepted Answer

When blacks are legally confined to certain professions, it creates an artificial scarcity of black workers in other professions, resulting in an inefficiently high wage for white workers in those professions. On the other hand, in the professions where blacks are restricted, there is an oversupply of black workers, leading to an inefficiently low wage for black workers in those professions.

Question 3

Suppose a shipping company required all applicants to lift fifty pound boxes on and off a truck for an hour to test their strength and endurance and suppose that resulted in 50 out of 100 black applicants being hired and 10 out of 100 white applicants being hired. If this test measured the performance required on the job then this would be an example of

Accepted Answer

This is an example of adverse impact discrimination as the test requirements disproportionately affect one group (in this case, black applicants) more than another group (white applicants) even though the test may measure the performance required on the job. This could indicate underlying bias or a lack of consideration for alternate ways of measuring strength and endurance that may not disproportionately affect one group.

Question 4

Suppose a shipping company required all applicants to lift fifty pound boxes on and off a truck for an hour to test their strength and endurance and suppose that resulted in 50 out of 100 male applicants to be hired and 10 out of 100 female applicants to be hired. If this test measured the performance required on the job then this would be an example of

Accepted Answer

This scenario describes adverse impact discrimination because although the test measures the performance required on the job, it has a greater negative impact on one group (females) than another (males). The fact that a significantly lower percentage of female applicants were hired suggests that the test may be biased against women.

Question 5

When government agents are sent as actors into a bank to test whether loans are more likely to be granted to whites than blacks they are using a statistical technique called

Accepted Answer

The technique described is referred to as auditing, which is a statistical tool used to test for racial or other forms of discrimination in lending practices. Regression is a separate statistical tool used to analyze the relationship between variables, standard deviation measures variability in data, and quadratification is not a recognized statistical term.

Question 6

Requiring new 16 year old teenage male drivers to pay more for auto insurance than their 16 year old female counterparts is an example of

Accepted Answer

The auto insurance company is using statistics to justify charging male teenage drivers more than female teenage drivers, based on their higher risk of getting into accidents. This is an example of statistical discrimination, which is a type of discrimination based on statistical data or averages, rather than individual characteristics or qualifications. It is not disparate treatment discrimination, which is intentional discrimination based on characteristics such as race, gender, or age. It is also not comprehensive discrimination or adverse impact discrimination, as these terms do not apply to this situation.

Question 7

Using supply and demand to model employment discrimination, if blacks are legally confined to certain professions then the ______ for workers in these professions is inefficiently ______.

Accepted Answer

When blacks are legally confined to certain professions, the supply of workers in these professions increases because a segment of the population is limited to these jobs. This leads to an inefficiently high supply of workers for these professions.

Question 8

Suppose a plant has 1000 employees, half of whom are from a minority population. Suppose further that, in order to cut costs, a manager must layoff 100 employees. If she chooses only non-minority workers to lay off because an analysis of productivity data suggests they are, on average 5% less efficient then she is

Accepted Answer

Choosing employees for layoff based on their group characteristics (in this case, non-minority status) and generalizing about their productivity is a form of statistical discrimination. This approach is illegal as it discriminates against individuals based on their group membership rather than their individual merits or performance.

Question 9

Many economists suggest that absent legal mechanisms of discrimination, the wage paid to whites and blacks will converge because

Accepted Answer

In a competitive labor market, employers will aim to hire workers at the lowest possible wage, regardless of race. If there are no legal barriers to hiring black workers, the increased pool of available labor will lead to a competition for workers, which will drive up wages. This is in the interest of profit-minded employers, who will seek to hire the most qualified workers at the lowest possible wage. Therefore, absent legal mechanisms of discrimination, the wage paid to whites and blacks will converge.

Question 10

When government agents are sent as actors into a bank to test whether loans are more likely to be granted to males than females they are using a statistical technique called

Accepted Answer

The statistical technique of sending government agents as actors to test whether loans are more likely to be granted to males than females is known as auditing. This technique is designed to detect potential discrimination and ensure that lending practices are fair and impartial. Regression, standard deviation, and quadratification are not appropriate for this type of analysis.

Question 11

Among the two most important methods economists use to identify illegal discrimination are

Accepted Answer

Economists use both "regression" techniques and "audit" methods to identify illegal discrimination. Regression techniques involve analyzing data to determine whether there is a correlation between a particular characteristic (such as race or gender) and outcomes (such as wages or hiring rates). Audit methods involve sending out identical resumes or job applications with different characteristics (such as different names that imply different races or genders) to see if there is a differential response rate. Both of these methods help economists to identify whether there are patterns of discrimination present in a particular market or industry.

Question 12

If a job requires a level of strength that the average woman cannot typically achieve, then interviewing and hiring no women would be an example of

Accepted Answer

Statistical discrimination occurs when an employer uses statistical data to make assumptions or stereotypes about certain groups of individuals, leading to discriminatory practices. In this case, assuming that all women cannot meet the strength requirements of the job is a stereotype and would be an example of statistical discrimination.

Question 13

Treating two otherwise equal people differently because of their gender or race is called

Accepted Answer

The answer of Treating two otherwise equal people differently because...

Question 14

Statistical discrimination is "rational" in the sense that it is consistent with profit maximization,

Accepted Answer

While statistical discrimination may be rational and consistent with profit maximization, it becomes illegal if it is used to exclusively hire or fire individuals based on their race. This violates anti-discrimination laws and can result in legal action being taken against the company.

Question 15

Doing something that is not necessarily discriminatory on its face, but is motivated by reference to well-established empirical regularities is

Accepted Answer

Statistical discrimination occurs when decisions are made based on statistical averages or empirical regularities, rather than individual merit, which may not be discriminatory on the surface but can lead to biased outcomes.

Question 16

When government agents use real life data on bank loans to determine if males and females are treated equally they are using the statistical technique called

Accepted Answer

Regression analysis is the statistical technique used to determine the relationship between variables. In this context, it would be used to analyze the relationship between gender (male or female) and the treatment they receive in terms of bank loans, such as interest rates offered, loan approval rates, etc., to determine if there is a statistical difference in treatment based on gender.

Question 17

If a restaurant in an integrated community has an entirely white wait-staff, economists suggest it is

Accepted Answer

The absence of diverse wait-staff in an integrated community restaurant could be due to either the employers' discriminatory hiring practices or catering to the preferences of bigoted customers for their own interests. Both possibilities suggest discrimination as the cause. Therefore, option D is the correct answer.

Question 18

If a restaurant hired only men to be bartenders because that is the way their patrons wanted it this would be an example of

Accepted Answer

The answer of If a restaurant hired only men to...

Question 19

When government agents use real life data on bank loans to determine if whites and blacks are treated equally they are using the statistical technique called

Accepted Answer

Regression is a statistical technique used to determine the relationship between two or more variables. In this case, the government agents are using bank loan data to determine if race is a variable that affects loan approval. By performing a regression analysis on the data, they can identify if there is a relationship between race and loan approval and if that relationship is statistically significant. Auditing, standard deviation, and quadratification are not statistical techniques used for this type of analysis.

Question 20

The removal of legal barriers alone may not be sufficient to eliminate the pay gap between whites and blacks because the increased competition may not be able to overcome

Accepted Answer

While the removal of legal barriers is an important step towards eliminating the pay gap, it may not be enough if employers have preferences to discriminate based on race and if customer preferences also influence their hiring decisions. Discrimination can persist even in the face of increased competition if these underlying biases are not addressed. Therefore, option D is the best choice, as it reflects the fact that both employer and customer preferences can contribute to the persistence of the pay gap.

Quiz 30: The Economics of Race and Discrimination