Question 1

For a computer repair shop, modems, CPUs, monitors, keyboards, and memory chips are all examples of variable costs.

Accepted Answer

A) True 
 B)False

Question 2

The key assumptions underlying break-even analysis are:

Accepted Answer

A)  important because they allow the technique to be used as a long-term pricing tool. 
B)  most valid for businesses in the growth stage of the product life cycle. 
C)  not valid in the actual business world. 
D)  valid in all instances. 
E)  most valid for service industries. 
A)  important because they allow the technique to be used as a long-term pricing tool. 
B)  most valid for businesses in the growth stage of the product life cycle. 
C)  not valid in the actual business world. 
D)  valid in all instances. 
E)  most valid for service industries.

Question 3

F&P Georgia Manufacturing makes automobile suspension assemblies for Honda Motors of America. The subassembly consists of 45 separate components put together with 208 spot welds, many of which are done by robotic welding machines. The lease payment on the robotic welding machines would be an example of a _____ cost.

Accepted Answer

A)  variable 
B)  markup 
C)  base 
D)  marginal 
E)  fixed 
A)  variable 
B)  markup 
C)  base 
D)  marginal 
E)  fixed

Question 4

Which of the following is NOT one of the factors of production?

Accepted Answer

A)  labor 
B)  product 
C)  capital 
D)  land 
E)  entrepreneurship 
A)  labor 
B)  product 
C)  capital 
D)  land 
E)  entrepreneurship

Question 5

The risk of _____ is that consumers begin to view the product (or retail store) as an undifferentiated commodity.

Accepted Answer

A)  cost-plus pricing 
B)  marginal cost pricing 
C)  pricing below competition 
D)  break-even pricing 
E)  pricing above competition 
A)  cost-plus pricing 
B)  marginal cost pricing 
C)  pricing below competition 
D)  break-even pricing 
E)  pricing above competition

Question 6

Marginal analysis is a good tool for studying past price movements.

Accepted Answer

A) True 
 B)False

Question 7

Middlemen add a _____ to the cost they pay for a product in order to cover anticipated operating expenses and provide a desired profit for the period.

Accepted Answer

A)  markup 
B)  markdown 
C)  variable cost 
D)  fixed revenue 
E)  turnover 
A)  markup 
B)  markdown 
C)  variable cost 
D)  fixed revenue 
E)  turnover

Question 8

Which of the following retailers is most likely to use above-market pricing in order to determine its prices?

Accepted Answer

A)  Waldenbooks 
B)  Spiegel catalog retailer 
C)  Rite-Aid pharmacy 
D)  Kroger supermarket 
E)  Tiffany jewelry store 
A)  Waldenbooks 
B)  Spiegel catalog retailer 
C)  Rite-Aid pharmacy 
D)  Kroger supermarket 
E)  Tiffany jewelry store

Question 9

According to economic theory, _____ is the attribute of an item that makes it capable of satisfying wants.

Accepted Answer

A)  value 
B)  price 
C)  utility 
D)  supply 
E)  demand 
A)  value 
B)  price 
C)  utility 
D)  supply 
E)  demand

Question 10

Which of the following could be in competition for the dollars required to pay for a cruise to Bermuda?

Accepted Answer

A)  a replacement water heater 
B)  an increase in college tuition 
C)  a fall which results in a hospital emergency room visit 
D)  a trip to the Grand Canyon 
E)  all of the above 
A)  a replacement water heater 
B)  an increase in college tuition 
C)  a fall which results in a hospital emergency room visit 
D)  a trip to the Grand Canyon 
E)  all of the above

Question 11

When Bethunia increased the price of her handcrafted wedding veils from $50 to $150, her sales increased as a result of _____ _____ because her customers inferred the quality of the product from its
 price.

Accepted Answer

The answer of When Bethunia increased the price of her...

Question 12

The average variable cost curve is usually U-shaped.

Accepted Answer

A) True 
 B)False

Question 13

A product's price is influenced by the product itself, its distribution channels, and its promotional objectives.

Accepted Answer

A) True 
 B)False

Question 14

The base price of a product includes the price of the unit at its point of production minus all discounts, and freight charges.

Accepted Answer

A) True 
 B)False

Question 15

A company that has a _____ _____ pricing objective could either seek to stabilize its prices or price to  meet the competition.

Accepted Answer

The answer of A company that has a _____ _____...

Question 16

Which of the following statements about the average variable cost curve is True?

Accepted Answer

A)  The average variable curve emulates a normal supply curve. 
B)  The average variable cost curve declines as output increases. 
C)  The average variable cost curve usually is U-shaped. 
D)  If variable costs per unit were constant, then the average variable cost curve would be a vertical line. 
E)  The average variable cost curve resembles a normal demand curve. 
A)  The average variable curve emulates a normal supply curve. 
B)  The average variable cost curve declines as output increases. 
C)  The average variable cost curve usually is U-shaped. 
D)  If variable costs per unit were constant, then the average variable cost curve would be a vertical line. 
E)  The average variable cost curve resembles a normal demand curve.

Question 17

Marginal cost is:

Accepted Answer

A)  the sum of all fixed and variable costs. 
B)  the total variable cost divided by the number of units produced and sold. 
C)  the cost of producing and selling one more unit. 
D)  a price element that remains constant regardless of how many units are produced. 
E)  a price element that is indirectly related to production. 
A)  the sum of all fixed and variable costs. 
B)  the total variable cost divided by the number of units produced and sold. 
C)  the cost of producing and selling one more unit. 
D)  a price element that remains constant regardless of how many units are produced. 
E)  a price element that is indirectly related to production.

Question 18

_____ is defined as the amount of money and/or other items needed to acquire a product

Accepted Answer

A)  Price 
B)  Income 
C)  Market 
D)  Utility 
E)  Return on investment 
A)  Price 
B)  Income 
C)  Market 
D)  Utility 
E)  Return on investment

Question 19

Giorgio Armani is a famous fashion designer. His original designs sell for thousands of dollars. What kind of pricing strategy would you expect to be used at a hotel that is licensed to use the Armani brand and that will be decorated by the designer himself?

Accepted Answer

A)  cost-plus pricing 
B)  marginal cost pricing 
C)  market-based pricing 
D)  break-even pricing 
E)  pricing above competition 
A)  cost-plus pricing 
B)  marginal cost pricing 
C)  market-based pricing 
D)  break-even pricing 
E)  pricing above competition

Question 20

Appstate sells bean mixes for soups. The company makes 2,000 packages per day. The total variable cost for making one bag for bean soup is $3. The average fixed cost per bag is $.90. The company charges $6.50 per bag in order to earn a 67 percent profit on each bag of bean mix. What method of pricing is Appstate using?

Accepted Answer

A)  expected pricing 
B)  cost-plus pricing 
C)  marginal cost pricing 
D)  price elasticity 
E)  price inelasticity 
A)  expected pricing 
B)  cost-plus pricing 
C)  marginal cost pricing 
D)  price elasticity 
E)  price inelasticity

For a computer repair shop, modems, CPUs, monitors, keyboards, and memory chips are all examples of variable costs.

The key assumptions underlying break-even analysis are:

Which of the following is NOT one of the factors of production?

The risk of _____ is that consumers begin to view the product (or retail store) as an undifferentiated commodity.

Marginal analysis is a good tool for studying past price movements.

Middlemen add a _____ to the cost they pay for a product in order to cover anticipated operating expenses and provide a desired profit for the period.

Which of the following retailers is most likely to use above-market pricing in order to determine its prices?

According to economic theory, _____ is the attribute of an item that makes it capable of satisfying wants.

Which of the following could be in competition for the dollars required to pay for a cruise to Bermuda?

When Bethunia increased the price of her handcrafted wedding veils from $50 to $150, her sales increased as a result of _ _ because her customers inferred the quality of the product from its price.

The average variable cost curve is usually U-shaped.

A product's price is influenced by the product itself, its distribution channels, and its promotional objectives.

The base price of a product includes the price of the unit at its point of production minus all discounts, and freight charges.

A company that has a _ _ pricing objective could either seek to stabilize its prices or price to meet the competition.

Which of the following statements about the average variable cost curve is True?

Marginal cost is:

_____ is defined as the amount of money and/or other items needed to acquire a product

Giorgio Armani is a famous fashion designer. His original designs sell for thousands of dollars. What kind of pricing strategy would you expect to be used at a hotel that is licensed to use the Armani brand and that will be decorated by the designer himself?

The Field of Marketing

The Dynamic Marketing Environment

Global Markets and Marketing

Consumer Markets and Buying Behavior

Business Markets and Buying Behavior

Marketing Research and Market Information

Product Planning and Development

Product-Mix Strategies

Brands, Packaging, and Other Product Features

Services Marketing

Pricing Strategies

Channels of Distribution

Retailing

Wholesaling and Physical Distribution

Integrated Marketing Communications

Personal Selling and Sales Management

Advertising, Sales Promotion, and Public Relations

Strategic Marketing Planning

Marketing Implementation and Evaluation

Marketing and the Information Economy

Market Segmentation Targeting and Positioning

Filters

Exam 12: Price Determination

For a computer repair shop, modems, CPUs, monitors, keyboards, and memory chips are all examples of variable costs.

The key assumptions underlying break-even analysis are:

Which of the following is NOT one of the factors of production?

The risk of _____ is that consumers begin to view the product (or retail store) as an undifferentiated commodity.

Marginal analysis is a good tool for studying past price movements.

Middlemen add a _____ to the cost they pay for a product in order to cover anticipated operating expenses and provide a desired profit for the period.

Which of the following retailers is most likely to use above-market pricing in order to determine its prices?

According to economic theory, _____ is the attribute of an item that makes it capable of satisfying wants.

Which of the following could be in competition for the dollars required to pay for a cruise to Bermuda?

When Bethunia increased the price of her handcrafted wedding veils from $50 to $150, her sales increased as a result of _____ _____ because her customers inferred the quality of the product from its price.

The average variable cost curve is usually U-shaped.

A product's price is influenced by the product itself, its distribution channels, and its promotional objectives.

The base price of a product includes the price of the unit at its point of production minus all discounts, and freight charges.

A company that has a _____ _____ pricing objective could either seek to stabilize its prices or price to meet the competition.

Which of the following statements about the average variable cost curve is True?

Marginal cost is:

_____ is defined as the amount of money and/or other items needed to acquire a product

Giorgio Armani is a famous fashion designer. His original designs sell for thousands of dollars. What kind of pricing strategy would you expect to be used at a hotel that is licensed to use the Armani brand and that will be decorated by the designer himself?

The Field of Marketing

The Dynamic Marketing Environment

Global Markets and Marketing

Consumer Markets and Buying Behavior

Business Markets and Buying Behavior

Marketing Research and Market Information

Product Planning and Development

Product-Mix Strategies

Brands, Packaging, and Other Product Features

Services Marketing

Pricing Strategies

Channels of Distribution

Retailing

Wholesaling and Physical Distribution

Integrated Marketing Communications

Personal Selling and Sales Management

Advertising, Sales Promotion, and Public Relations

Strategic Marketing Planning

Marketing Implementation and Evaluation

Marketing and the Information Economy

Market Segmentation Targeting and Positioning

Filters

When Bethunia increased the price of her handcrafted wedding veils from $50 to $150, her sales increased as a result of _ _ because her customers inferred the quality of the product from its price.

A company that has a _ _ pricing objective could either seek to stabilize its prices or price to meet the competition.