 |
| 1 | |
The first handheld calculators were priced at several hundred dollars so that its manufacturer could recoup research and development costs. Even though the first calculators only added, subtracted, multiplied, divided, and did square roots, they were so superior to other methods that customers were willing to pay the asked price. The manufacturer of the first handheld calculators used: |
| | A) | skimming pricing. |
| | B) | penetration pricing. |
| | C) | price lining. |
| | D) | odd-even pricing. |
| | E) | demand-backward pricing. |
|
|
|
| 2 | |
While many people believe shoes are simply something that you wear on your feet to protect them from the environment, many other people believe the kind of shoes a person wears makes a statement about them and their lifestyle. These people are willing to pay $400 or more for a pair of shoes because to them the price indicates quality. The marketer of these shoes would use: |
| | A) | yield management pricing. |
| | B) | target pricing. |
| | C) | customary pricing. |
| | D) | prestige pricing. |
| | E) | price lining. |
|
|
|
| 3 | |
The Wm. Wrigley Jr. Co. recently introduced a new flavor of Orbit brand sugar free chewing gum—mint mojito. The introductory price was low so that it would create loyal customers for the flavor quickly. In this example Wrigley is using |
| | A) | skimming pricing. |
| | B) | penetration pricing. |
| | C) | price lining. |
| | D) | odd-even pricing. |
| | E) | demand-backward pricing. |
|
|
|
| 4 | |
Chico's sells women's sportswear. A simple tank top with the Chico's label costs $48. If you are you simply want a tank top, you can buy a tank top for $5 at a Family Dollar Store, but it won't have the Chico's label. What kind of demand-oriented approach to pricing is being used by this manufacturer? |
| | A) | experience curve pricing |
| | B) | target market share pricing |
| | C) | demand-backward pricing |
| | D) | prestige pricing |
| | E) | flexible pricing |
|
|
|
| 5 | |
The prices for all fruit trees sold in Stark Bros. fruit trees and landscaping catalog end in $.99. Stark Bros. uses: |
| | A) | odd-even pricing. |
| | B) | dynamic pricing. |
| | C) | price lining. |
| | D) | bundle pricing. |
| | E) | experience curve pricing. |
|
|
|
| 6 | |
A 61-piece set of Noritake china costs $872.99, but if you buy the pieces individually, you can expect to pay $1,137. The lower price for the set is an example of: |
| | A) | price skimming. |
| | B) | price lining. |
| | C) | penetration pricing. |
| | D) | yield management pricing. |
| | E) | bundle pricing. |
|
|
|
| 7 | |
If you are planning a trip to New York City and want a hotel room overlooking Central Park, you are likely to pay over $500 per night if you reserve the room through a hotel, but if you are flexible about the night you want, you can contact Travelocity and stay in that room for $100. To what kind of pricing policy is this practice most closely related? |
| | A) | yield management pricing |
| | B) | target pricing |
| | C) | customary pricing |
| | D) | prestige pricing |
| | E) | price lining |
|
|
|
| 8 | |
For which of the following products is the supplier most likely to use cost-plus-fixed-fee pricing? |
| | A) | a county water treatment plant |
| | B) | a geostationary low earth orbit (LEO) satellite system for communication |
| | C) | a mobile library |
| | D) | a cell phone tower |
| | E) | a miniature golf course |
|
|
|
| 9 | |
The two variations of cost-plus pricing are: |
| | A) | cost-plus percentage-of-cost pricing and cost-plus fixed-fee pricing. |
| | B) | cost-plus ROI pricing and cost-minus markdown pricing. |
| | C) | target return on sales pricing and target return on investment pricing. |
| | D) | cost-plus fixed-fee pricing and cost-plus variable-fee pricing. |
| | E) | dynamic pricing and one-price pricing. |
|
|
|
| 10 | |
Which of the following statements about cost-oriented approaches is true? |
| | A) | These methods focus on the demand side of the pricing problem and involve stimulating demand and decreasing revenue. |
| | B) | These methods focus on the supply side of the pricing problem and involve considerations of production and marketing expenses. |
| | C) | Target return on investment is an example of a cost-based method. |
| | D) | Experience curve pricing is simple to use because costs predictably decrease by 25 percent with each doubling of production. |
| | E) | Cost-oriented approaches are subcategories of competition-based methods so revenues are a critical factor. |
|
|
|
| 11 | |
The retail price of laser printers has decreased from over $1500 to less than $200. This is due in large part to: |
| | A) | penetration pricing. |
| | B) | prestige pricing. |
| | C) | odd-even pricing. |
| | D) | experience curve pricing. |
| | E) | customary pricing. |
|
|
|
| 12 | |
Imagine that the owner of Lewis Edibles, Inc., the manufacturer of Tongue Tinglin' barbecue sauce has sold on average 1,000 jars for the last five years. The company's costs over the same period of time have averaged $4,000. If the company earns a 20 percent return on sales, what is the price of a jar of barbecue sauce? |
| | A) | $2.00 |
| | B) | $2.50 |
| | C) | $4.00 |
| | D) | $5.00 |
| | E) | $10.00 |
|
|
|
| 13 | |
Consumers buy water and soda pop from vending machines. Traditionally, the price of each of these products is about $1.00. If a marketer charges a significantly higher price for such products dispensed by vending machines, sales are likely to decline. In order to avoid such declines in sales, marketers tend to be very consistent in the price charged for vending machine products. This is an example of marketers employing a __________ strategy. |
| | A) | below-market pricing |
| | B) | skimming pricing |
| | C) | penetration pricing |
| | D) | customary pricing |
| | E) | loss-leader pricing |
|
|
|
| 14 | |
When Pechin's, a legendary supermarket 50 miles south of Pittsburgh, prices rib steaks at $2.29 a pound, which is below its cost, it is attempting not to sell steaks, but to: |
| | A) | drive its competition out of business. |
| | B) | attract customers in hopes they will buy other products as well. |
| | C) | fill its parking lot so its store will look successful. |
| | D) | help the local ranching community dispose of excess beef. |
| | E) | circumvent fair trade rulings by the Federal Trade Commission (FTC). |
|
|
|
| 15 | |
In the magazine industry, subscription prices can vary depending on the method of solicitation. The magazine industry uses: |
| | A) | customary pricing. |
| | B) | flexible-price policy. |
| | C) | basing-point pricing. |
| | D) | price lining. |
| | E) | loss-leader pricing. |
|
|
|
| 16 | |
If a safety engineer orders one pair of Tingley HazProof Boots to protect plant workers from chemical spills on the floor, the boots cost $65.65. If he orders three pairs at the same time, the price drops to $59.10 per pair of boots. This is an example of a: |
| | A) | promotional allowance. |
| | B) | cumulative quantity discount. |
| | C) | cash discount. |
| | D) | functional discount. |
| | E) | noncumulative quantity discount. |
|
|
|
| 17 | |
A manufacturer estimates that consumers will accept a price of $75 for a handbag. If the manufacturer expects to offer trade discounts of 35/15/5 to retailers, wholesalers, and agents, what price will the manufacturer receive for the handbag? |
| | A) | $26.25 |
| | B) | $33.75 |
| | C) | $39.37 |
| | D) | $41.25 |
| | E) | $63.25 |
|
|
|
| 18 | |
When Ruth makes a purchase on www.ebay.com, she is responsible for paying all shipping costs for the purchased item. In fact, once the item is shipped, she owns it and should purchase insurance if it is likely to get broken while in transit. This shipping arrangement is most closely related to: |
| | A) | basing-point pricing. |
| | B) | FOB origin pricing. |
| | C) | functional pricing. |
| | D) | quantity pricing. |
| | E) | geographic pricing. |
|
|
|
| 19 | |
A company placing an order from the Lab Safety Supply catalog is instructed to add 6 percent of the total cost of the order to pay shipping. Which method of shipping does this catalog supplier use? |
| | A) | single-zone pricing |
| | B) | flexible-price pricing |
| | C) | FOB origin pricing |
| | D) | uniform delivered pricing |
| | E) | basing-point pricing |
|
|
|
| 20 | |
Which of the following are geographical adjustments to list or quoted prices? |
| | A) | FOB origin pricing |
| | B) | uniform delivered pricing |
| | C) | single-zone pricing |
| | D) | multiple-zone pricing |
| | E) | all of the above are geographical adjustments |
|
|
.