Suppose Someone Devises a New IQ Test and We Discover

question 160

Multiple Choice

Suppose someone devises a new IQ test and we discover that tall people get higher test scores than short people do. What, if anything, should we do to determine whether or not this test is biased against short people?

• A) Interview short people who took the test to see if they felt the test was biased against them.
• B) Statistically analyze the results to see if, in fact, the two groups did get different scores.
• C) Look at school performances to see if the test accurately predicts performances of both short and tall people.
• D) Nothing else needs to be done: The mere fact that the test reports a difference between short and tall people is evidence of test bias.

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Definitions:

Operating Leverage

An indicator of the extent to which increases in sales revenue result in an increase in operating profit, showing the level of fixed expenses within a business's cost composition.

Sales Impact

The effect of marketing and sales activities on the volume or value of product sales.

Margin of Safety

The difference between actual sales and break-even sales, indicating the extent to which sales can drop before losses occur.

Variable Costs

Costs that vary directly with the level of production or volume of output.