Questions:
Question 1
1. Which of the following statements about ethical behavior in business is TRUE?
The legal environment sets the highest standard of ethical behavior.
The legal environment sets the maximum standard of ethical behavior.
The legal environment sets the minimal standard of ethical behavior.
The legal environment sets the normative standard of ethical behavior.
Question 2
1. Marketers estimating the demand curve:
do not have to worry about price competition due to the nature of the demand curve.
can use marginal analysis to help it maximize profits.
will have to charge the market price which is set by the intersection of industry supply and demand.
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 3
1. The monopolistic competition that is typical of the U.S. economy:
always leads to higher prices, but it may not lead to higher consumer satisfaction.
is a problem because it does not result in products that reflect consumer's social values.
is the result of consumer preferences.
is the result of manipulation of markets by business firms.
Question 4
1. Which of the following statements BEST describes a markup?
A markup is a dollar amount subtracted from the cost of products to get the selling price.
A markup is the selling price minus the cost of the item, divided by the cost of the item-times 100.
A markup is the selling price of an item, divided by its cost-times 100.
A markup is a dollar amount added to the cost of products to get the selling price.
Question 5
1. A market-directed economy:
ensures that voters and politicians agree what problem has to be solved first.
makes efficient use of resources.
concentrates solely on profit generation.
spreads income evenly among the population.
Question 6
1. If a profit-oriented marketing manager does not know the exact shape of the firm's demand curve, marginal analysis:
is useless.
will suggest the same price as break-even analysis.
may be useful anyway since a profitable region usually surrounds the best price.
suggests that the only sensible approach is to use average-cost pricing.
Question 7
1. Elijah has classified the following items under variable costs. Which item has he classified INCORRECTLY?
expenses for parts
wages
outgoing freight
property taxes
Question 8
1. Mark is trying to determine his firm's average cost per unit of production. He finds that the cost for all labor and materials is $80,000 and fixed overhead expenses are $40,000. If the company produces 20,000 items in the time period, the average cost is __________.
$12
$6
$2
$4
Question 9
1. Given the following data, compute the break-even point (BEP) in DOLLARS. Selling price = $2.00, Variable cost = $1.00, Fixed cost = $150,000
$300,000
$400,000
$150,000
$200,000
Question 10
1. Which of the following statements BEST describes a marketing manager?
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.
A marketing manager should recognize that many consumers who complain are troublemakers and that not much can or should be done about their complaints.
A marketing manager should assume that most customers who are dissatisfied will complain, but that people who are satisfied will not.
A marketing manager should be concerned that many of the complaints that are reported are never resolved.