The Klan Motel Is One of Twenty Motels in Town

question 4

Multiple Choice

The Klan Motel is one of twenty motels in town but the only one that refuses to rent rooms to non-whites. Congress holds that motels may not discriminate on the basis of race. The Klan Motel challenges the regulation as it applies to that motel. The owner will:

• A) win; so long as there are plenty of motels available, there is no significant effect on interstate commerce by such discrimination
• B) win; a motel is a place of private, not public, accommodations
• C) lose; all forms of racial discrimination are forbidden by the Commerce Clause
• D) lose if the state in which the motel is located has passed a similar law to apply to motels
• E) none of the other choices

---

Definitions:

Acid-Test Ratio

A stringent indicator of a company's liquidity, calculated by dividing its liquid assets (excluding inventory) by its current liabilities.

Balance Sheet

A financial report detailing a firm's assets, liabilities, and equity of shareholders at a particular moment.

Price-Earnings Ratio

A valuation ratio of a company's current share price compared to its per-share earnings, used to evaluate a company's financial health and potential growth.

Market Price

The current price at which an asset or service can be bought or sold in a marketplace.