1. If a profit-oriented marketing manager does not know the exact shape of the firm’s demand curve, marginal analysis:
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is useless. |
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will suggest the same price as break-even analysis. |
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may be useful anyway since a profitable region usually surrounds the best price. |
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suggests that the only sensible approach is to use average-cost pricing. |
Question 2
A market-directed economy:
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ensures that voters and politicians agree what problem has to be solved first. |
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makes efficient use of resources. |
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concentrates solely on profit generation. |
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spreads income evenly among the population. |
Question 3
1. Which of the following statements about ethical behavior in business is TRUE?
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The legal environment sets the highest standard of ethical behavior. |
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The legal environment sets the maximum standard of ethical behavior. |
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The legal environment sets the minimal standard of ethical behavior. |
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The legal environment sets the normative standard of ethical behavior. |
Question 4
Elijah has classified the following items under variable costs. Which item has he classified INCORRECTLY?
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expenses for parts |
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wages |
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outgoing freight |
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property taxes |
Question 5
Given the following data, compute the break-even point (BEP) in DOLLARS. Selling price = $2.00, Variable cost = $1.00, Fixed cost = $150,000
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$300,000 |
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$400,000 |
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$150,000 |
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$200,000 |
Question 6
Marketers estimating the demand curve:
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do not have to worry about price competition due to the nature of the demand curve. |
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can use marginal analysis to help it maximize profits. |
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will have to charge the market price which is set by the intersection of industry supply and demand. |
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could use marginal analysis to compare alternatives–but this would not help in pricing because this method focuses on selling one more unit and therefore ignores total profitability. |
Question 7
The monopolistic competitition that is typical of the U.S. economy:
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always leads to higher prices, but it may not lead to higher consumner satisfaction. |
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is a problem because it does not result in products that reflect consumers social values. |
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is the result of consumer preferences. |
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is the result of manipulation of markets by business firms. |
Question 8
Which of the following statements BEST describes a marketing manager?
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A marketing manager should know that most consumer complaints do not require a response because the consumer’s dissatisfaction is beyond the control of the firm. |
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A marketing manager should recognize that many consumers who complain are troublemakers and that not much can or should be done about their complaints. |
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A marketing manager should assume that most customers who are dissatisfied will complain, but that people who are satisfied will not. |
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A marketing manager should be concerned that many of the complaints that are reported are never resolved. |
Question 9
Which of the following statements BEST describes a markup?
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A markup is a dollar amount subtracted from the cost of products to get the selling price. |
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A markup is the selling price minus the cost of the item, divided by the cost of the item-times 100. |
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A markup is the selling price of an item, divided by its cost-times 100. |
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A markup is a dollar amount added to the cost of products to get the selling price. |
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