1.Which of the following statements are true? a) When an Insurance company sets different premia for men and women, who are otherwise similar, just because they have different death rates, this is evidence to conclude that there is statistical discrimination. b) A black driver is 7.7 times more likely to be searched on US highways than a white driver. This is enough evidence to conclude there is taste based discrimination. c) A black driver is 7.7 times more likely to be searched on US highways than a white driver. This is enough evidence to conclude there is statistical discrimination. d) If hit rates for Blacks and Whites are the same, this can be interpreted as evidence that there is no statistical discrimination at play. e) If hit rates for Hispanics and Whites are very different that can be interpreted as evidence that there is taste based discrimination at play.

2.The government considers taxing the market for pink lady apples. Assume that this market has a downward sloping demand curve and an upward sloping supply curve. The tax division prepared the following statements for the PM to consider, which of them are true? a) If the tax is a unit tax on consumers, they will pay the full burden of the tax. b) If the tax is a unit tax on producers, they will pay the full burden of the tax. c) No matter if the tax is on consumers or on producers, the distribution of the burden of the tax is going to be the same. d) If the tax you choose is a 1 pound per unit consumed, paid by the consumer, the price in the market will surely go down by more than one pound. e) If the tax you choose is a 1 pound per unit produced, paid by the producer, the price in the market will surely go down by less than one pound.