 |
| 1 | |
Demand-oriented approaches weigh factors underlying expected __________ more heavily than factors such as cost, profit and competition when selecting a price level. |
| | A) | customer tastes and preferences |
| | B) | total sales revenue |
| | C) | prevailing prices |
| | D) | number of others selling the product |
| | E) | mark-up |
|
|
|
| 2 | |
The Apple iPhone was recently introduced at an initial price of US$600. People waited in line overnight so they could be one of the first to own these unique phones. Which pricing strategy did Apple use to help recoup its research and development costs for the phone? |
| | A) | Price lining |
| | B) | Experience curve pricing |
| | C) | Customary pricing |
| | D) | Skimming pricing |
| | E) | Target pricing |
|
|
|
| 3 | |
When Hallmark cards introduced a line of US$.99 cards (about half the price of the previously least expensive cards sold by Hallmark), the greeting card company was trying to appeal to a mass market that was price sensitive. Hallmark was using a __________ pricing strategy. |
| | A) | prestige |
| | B) | skimming |
| | C) | penetration |
| | D) | demand-backward |
| | E) | experience-curve |
|
|
|
| 4 | |
Which of the following statements about price lining is true? |
| | A) | This method assumes that demand is elastic at each price point used |
| | B) | Primarily government contractors use this method |
| | C) | Those who use this method prefer to have at least a dozen different price points |
| | D) | This method assumes demand is elastic between the price points |
| | E) | All the above statements about price lining are true |
|
|
|
| 5 | |
NTUC Fairprice sells many types of snacks and candies. To price its inventory, Fairprice adds 35 percent to the cost of each bolt of fabric and every spool of thread. What is this pricing method called? |
| | A) | Target return-on-sales pricing |
| | B) | Flexible pricing |
| | C) | Cost-plus fixed-fee pricing |
| | D) | Standard markup pricing |
| | E) | Customary pricing |
|
|
|
| 6 | |
When you buy a car from a dealership, you are offered the car at a single price. You can buy it or not, but there is no variation in price under the seller's __________. |
| | A) | penetration strategy |
| | B) | odd-even pricing |
| | C) | one-price policy |
| | D) | bundle-pricing policy |
| | E) | flexible-price policy |
|
|
|
| 7 | |
The price for Nintendo's Wii video game console was likely at or below its cost, but the price of its video games was set high enough to cover the loss and deliver a handsome profit for the Nintendo product line. This example illustrates Nintendo's use of __________. |
| | A) | line item pricing |
| | B) | product-line pricing |
| | C) | price lining |
| | D) | customary pricing |
| | E) | discretionary pricing |
|
|
|
| 8 | |
The three major types of special adjustments to list or quoted price are __________. |
| | A) | discounts, allowances, geographical adjustments |
| | B) | demand-oriented, cost-oriented, profit-oriented |
| | C) | one price, flexible price, discounts |
| | D) | discounts, allowances, competition-oriented |
| | E) | discounts, incremental costs and revenues, geographic |
|
|
|
| 9 | |
Many times low-cost airlines will enter a particular city pair market at a much lower price than that offered by the major airline currently serving the market. When the low-cost airline enters, the major airline will then cut its prices, many times at or below those offered by the low-cost airline, hoping to eventually drive the smaller carrier out of its market. This is an example of a company failing to consider __________ effects when planning its strategy. |
| | A) | company |
| | B) | social responsibility |
| | C) | backlash |
| | D) | competitive |
| | E) | customer |
|
|
|
| 10 | |
What is the main difficulty involved in performing a marginal analysis of the incremental costs and revenues that could result from a new advertising campaign? |
| | A) | Measuring the extra fixed cost involved |
| | B) | Measuring the extra variable cost involved |
| | C) | Measuring the incremental revenue generated by the change |
| | D) | Measuring the incremental cost incurred by the change |
| | E) | All of the above |
|
|
|
| 11 | |
If you buy one pair of socks, the cost is $4, but if you buy ten at one time, the price per pair is reduced to $3.50. This is an example of a __________. |
| | A) | promotional allowance |
| | B) | cumulative quantity discount |
| | C) | bundle pricing |
| | D) | functional discount |
| | E) | noncumulative quantity discount |
|
|
|
| 12 | |
Manufacturers use seasonal discounts to __________. |
| | A) | entice dealers to purchase seasonal merchandise earlier in the selling season |
| | B) | get rid of dated merchandise |
| | C) | prolong the peak seasonal selling season |
| | D) | "load up" their dealers |
| | E) | show consumers holiday goodwill |
|
|
|
| 13 | |
A manufacturer does marketing research and estimates that consumers will accept a price of $50 for a jacket. If the manufacturer expects to offer trade discounts of 40/10/5 to retailers, wholesalers and agents, what price will the manufacturer receive for the jacket? |
| | A) | $45 |
| | B) | $27.50 |
| | C) | $25.65 |
| | D) | $22.50 |
| | E) | $10.05 |
|
|
|
| 14 | |
If an invoice for $45,000 is billed 2/10 net 30, what is the highest annual interest rate that one would rationally pay to borrow money in order to take advantage of the cash discount if the only consideration is a lower annual interest rate than charged on the invoice? |
| | A) | 71.9 percent |
| | B) | 9.9 percent |
| | C) | 17.9 percent |
| | D) | 23.9 percent |
| | E) | 35.9 percent |
|
|
|
| 15 | |
Lee Kum Kee, based in Guangdong Province, China produces and ships many kinds of Chinese sauces to many parts of the world like Australia/New Zealand, Europe and North America. Which of the following statements about the shipment of is true assuming Lee Kum Kee uses FOB origin pricing? |
| | A) | All buyers will pay no shipping costs because they are paid by Lee Kum Kee. |
| | B) | Lee Kum Kee pays the same amount as the buyer no matter where the compressor is shipped |
| | C) | It will cost Lee Kum Kee more to ship to North America than to Australia. |
| | D) | A buyer in New York, will pay significantly more shipping charges than a buyer in Sydney and Lee Kum Kee will pay none |
| | E) | All buyers will pay the same shipping costs and Lee Kum Kee will pay none |
|
|
|
| 16 | |
A home appliance store advertises a 40 inch Panasonic LCD for S$800. You enter the store intending to purchase the Panasonic LCd) The salesperson informs you that they are all sold out. She tells you that the "sale" Panasonic LCDs were factory seconds and that if you want the best quality picture, you should buy the Sony Bravia, which sells for S$1000. This scenario has elements of which type of deceptive pricing? |
| | A) | Comparable value comparisons |
| | B) | Former price comparisons |
| | C) | Comparisons with suggested prices |
| | D) | Conditional bargains |
| | E) | Bait and switch |
|
|
|
| 17 | |
Which of the following statements about geographical pricing is true? |
| | A) | Geographical pricing is one type of pricing that has never fallen under the scrutiny of any country’s legal system |
| | B) | FOB origin pricing is legal |
| | C) | Geographical pricing has come under more government scrutiny than any other pricing policy |
| | D) | FOB freight-allowed pricing practices are illegal |
| | E) | Basing-point pricing is the only form of geographical pricing that is not under some type of legal restriction |
|
|
|
| 18 | |
When two or more competitors explicitly or implicitly set prices, this practice is called __________. |
| | A) | horizontal price fixing |
| | B) | vertical price fixing |
| | C) | competitive price fixing |
| | D) | diagonal price fixing |
| | E) | explicit price fixing |
|
|
|
| 19 | |
Which of the following statements about predatory pricing is true? |
| | A) | Predatory pricing is the practice of charging a very low price for a product. |
| | B) | Predatory pricing serves the purpose of driving competitors out of business. |
| | C) | Predatory pricing is illegal under anti-competition regulations. |
| | D) | It is hard to prove the presence of predatory pricing. |
| | E) | All of the above statements about predatory pricing are true. |
|
|
|
| 20 | |
According to the text, the Federal Trade Commission (FTC) is especially concerned about the __________. |
| | A) | overuse of FOB origin pricing |
| | B) | misuse of quantity discounting |
| | C) | elimination of seasonal discounts |
| | D) | widespread use of fixed pricing |
| | E) | misuse of the word "free" in promotions |
|
|
.