microeconomics

B (i) does not constitute price discrimination. People with more secured jobs and stable income would be less likely to default the debt than people with unstable income. Loans to these borrowers are less risky and the bank can therefore offer more favourable terms. Becuase the risks to the bank are not the same when dealing with people with different financial backgrounds, the interest rates difference reflect the risk and is not a case of price discrimination.

B(ii) is not price discrimination. It pays for universities to do so in order to attract better students. It also benefits the students to interact with people from different backgrounds. Academically smart students will benefit the university in the long run.

Price discrimination is the situation where different prices are charged to different people when the difference in the cost of the transaction is minimal. The case where a doctor charges different patients different prices for the same operation is an example of price discrimination.