Question 1

Geographic pricing is a technique that greatly simplifies the pricing function.

Accepted Answer

A) True 
 B)False

Question 2

Price is a measure of what the customer must exchange to obtain goods and services and is an indicator of value to the customer.

Accepted Answer

A) True 
 B)False

Question 3

One advantage of installment loans for a small business is that the business owner retains a security interest in the item sold as collateral on the loan.

Accepted Answer

A) True 
 B)False

Question 4

In cases in which development costs are extremely high,as in new high technology products,the skimming technique helps the firm recoup its research and development costs in a shorter time span.

Accepted Answer

A) True 
 B)False

Question 5

A ________ strategy works well when a company has a mature product,loyal customers,a reputation for quality,and few competitors.

Accepted Answer

A) penetration 
B) skimming 
C) discount 
D) price lining

Question 6

XYZ manufactures computer hardware.The marketing executives,in order to increase the market share,forced a business to accept a suggested retail price and not to sell the items below the stated price.

Accepted Answer

A) This practice violates the Sherman Antitrust Act. 
B) There is no violation.According to a recent Supreme Court decision,this is fine. 
C) This practice violates the Fair Price Protection Act. 
D) As long as the manufacturer offers rebates,they can do whatever they want.

Question 7

For a service firm,labor and materials comprise the largest portion of the cost of the service provided.

Accepted Answer

A) True 
 B)False

Question 8

A firm sells small-ticket items to their regular customers on customer charge accounts and then bills the customers each month.This type of credit arrangement is called:

Accepted Answer

A) trade credit. 
B) charge account credit. 
C) installment credit. 
D) debit card credit.

Question 9

A penetration pricing strategy allows the business to build market share quickly.

Accepted Answer

A) True 
 B)False

Question 10

Brenda is starting her business by offering exclusive hand-bags.The desired image that she should set for her handbags is "exclusive." She should set the price at:

Accepted Answer

A) discount. 
B) bargain. 
C) value. 
D) upscale.

Question 11

Baseball cards usually sell for 10 cents each.The Card Shop advertises them at "12 for $1.00." This is:

Accepted Answer

A) price lining. 
B) leader pricing. 
C) odd pricing. 
D) multiple unit pricing.

Question 12

Odd pricing is a form of psychological pricing.

Accepted Answer

A) True 
 B)False

Question 13

The manufacturer's suggested price takes into account the small firm's cost structure and its competitive situation.

Accepted Answer

A) True 
 B)False

Question 14

A reliable cost accounting system is necessary for accurate pricing.The traditional method of product costing,where the costs of direct materials,direct labor,and factory overhead are included,is called ________ costing.

Accepted Answer

A) absorption 
B) break-even 
C) direct 
D) variable

Question 15

What are debit cards?

Accepted Answer

The answer of What are debit cards?...

Question 16

Small businesses whose pricing decisions are greatly affected by the costs of shipping merchandise to customers across a wide range of geographic regions frequently employ one of the ________ techniques.

Accepted Answer

A) opportunistic pricing 
B) geographic pricing 
C) leader pricing 
D) price lining

Question 17

________ pricing policy is used to introduce a relatively low-priced good into a market where no "elite segment" exists.

Accepted Answer

A) Penetration 
B) Skimming 
C) Discount 
D) Sliding-down-the-demand-curve

Question 18

________ is grouping together several products or services,or both,into a package that offers customers extra value at a special price.

Accepted Answer

A) Leader pricing 
B) Price lining 
C) Discount pricing 
D) Bundling

Question 19

________ costing includes only those costs that vary directly with the volume of an item produced.

Accepted Answer

A) Absorption 
B) Break-even 
C) Indirect 
D) Direct

Question 20

Under FOB Factory terms,the customer pays all shipping costs.

Accepted Answer

A) True 
 B)False

Exam 11: Pricing and Credit Strategies

Geographic pricing is a technique that greatly simplifies the pricing function.

Price is a measure of what the customer must exchange to obtain goods and services and is an indicator of value to the customer.

One advantage of installment loans for a small business is that the business owner retains a security interest in the item sold as collateral on the loan.

In cases in which development costs are extremely high,as in new high technology products,the skimming technique helps the firm recoup its research and development costs in a shorter time span.

A ________ strategy works well when a company has a mature product,loyal customers,a reputation for quality,and few competitors.

XYZ manufactures computer hardware.The marketing executives,in order to increase the market share,forced a business to accept a suggested retail price and not to sell the items below the stated price.

For a service firm,labor and materials comprise the largest portion of the cost of the service provided.

A firm sells small-ticket items to their regular customers on customer charge accounts and then bills the customers each month.This type of credit arrangement is called:

A penetration pricing strategy allows the business to build market share quickly.

Brenda is starting her business by offering exclusive hand-bags.The desired image that she should set for her handbags is "exclusive." She should set the price at:

Baseball cards usually sell for 10 cents each.The Card Shop advertises them at "12 for $1.00." This is:

Odd pricing is a form of psychological pricing.

The manufacturer's suggested price takes into account the small firm's cost structure and its competitive situation.

A reliable cost accounting system is necessary for accurate pricing.The traditional method of product costing,where the costs of direct materials,direct labor,and factory overhead are included,is called ________ costing.

What are debit cards?

Small businesses whose pricing decisions are greatly affected by the costs of shipping merchandise to customers across a wide range of geographic regions frequently employ one of the ________ techniques.

________ pricing policy is used to introduce a relatively low-priced good into a market where no "elite segment" exists.

________ is grouping together several products or services,or both,into a package that offers customers extra value at a special price.

________ costing includes only those costs that vary directly with the volume of an item produced.

Under FOB Factory terms,the customer pays all shipping costs.