Statistical discrimination:
A)can limit the opportunities of individuals just because they happen to belong to a certain group of people.
B)is a rational response to information asymmetry.
C)is not always a legal solution to information asymmetry.
D)All of these statements are true.

Question

Quizplus · Accepted Answer

Statistical discrimination refers to the practice of making assumptions (either consciously or subconsciously) about an individual's characteristics or abilities based on their membership in a particular group. This can lead to limiting opportunities of individuals just because they happen to belong to a certain group of people, which is the statement mentioned in choice A. However, statistical discrimination can also be a rational response to information asymmetry, which is the statement mentioned in choice B. Finally, it should be noted that statistical discrimination is not always a legal solution to information asymmetry, which is the statement mentioned in choice C. Therefore, all of the statements provided are true, making choice D the correct answer.

Statistical Discrimination