Question 1

Which of the following is an example of a variable cost for an amusement park?

Accepted Answer

A)  salary of the park manager 
B)  food cart supplies 
C)  liability insurance 
D)  interest on the property's mortgage 
E)  property taxes

Question 2

Often consumers base their perception of price on what they perceive to be the customary or ________.

Accepted Answer

A)  dynamic price 
B)  fair price 
C)  target price 
D)  list price 
E)  assimilated price

Question 3

Savings for You, a discount retail chain, is highly competitive. When entering a new market, Savings for You often cuts prices so deeply that it sells below costs, effectively pushing smaller companies with less purchasing power out of the market. Savings for You is most at risk of being accused of ________.

Accepted Answer

A)  skimming prices 
B)  price-fixing 
C)  predatory pricing 
D)  deceptive pricing 
E)  loss leader pricing

Question 4

When setting prices, a leading manufacturer of nutritional supplements decided to institute a pricing strategy that would support a five percent increase in sales over the next three years. What type of pricing objective has the company set?

Accepted Answer

A)  profit 
B)  sales 
C)  competitive effect 
D)  cost-plus 
E)  value

Question 5

A company in an industry characterized by monopolistic competition is most likely to adopt status quo pricing objectives.

Accepted Answer

A) True 
 B)False

Question 6

In a market with ________, the market consists of many buyers and a few sellers who are likely to have similar pricing.

Accepted Answer

A)  pure competition 
B)  monopolistic competition 
C)  oligopolistic competition 
D)  vertical integration 
E)  inflation

Question 7

Valeo Fashions has just introduced a new line of fashion dresses for teens. The line will initially enter the market at high prices in a ________ strategy.

Accepted Answer

A)  penetration pricing 
B)  skimming price 
C)  keystoning 
D)  yield management pricing 
E)  value pricing

Question 8

Which of the following is an advantage of using cost-based pricing methods?

Accepted Answer

A)  They consider external factors such as competition. 
B)  They include consideration of the effects of demand. 
C)  They are relatively simple to calculate. 
D)  They make accurate cost estimating a simple process. 
E)  They take the product life cycle into consideration.

Question 9

Bayer AG agreed to pay $46 million as part of a law settlement for conspiring with Archer-Daniels-Midland (ADM) to keep prices of citric acid at a certain level. These two international companies were guilty of ________.

Accepted Answer

A)  price lining 
B)  skimming pricing 
C)  predatory pricing 
D)  price-fixing 
E)  placebo pricing

Question 10

A(n) ________ occurs when customers decide that two different brands of pain reliever have the same product quality because they have basically the same product characteristics and similar prices.

Accepted Answer

A)  clouding effect 
B)  assimilation effect 
C)  bundling effect 
D)  contrast effect 
E)  price-placebo effect

Question 11

Price leadership strategies provide a legal way for firms to agree on prices without ever explicitly coordinating rates.

Accepted Answer

A) True 
 B)False

Question 12

From a marketer's point of view, price lining is a way to do which of the following?

Accepted Answer

A)  control supply 
B)  maximize profits 
C)  make the business more socially responsible 
D)  pass shipping costs on to consumers 
E)  eliminate price elasticity concerns

Question 13

Consumers usually perceive higher-priced products as ________.

Accepted Answer

A)  out of reach for all but the wealthy 
B)  having high quality 
C)  having low profit margins 
D)  having cost-based prices 
E)  being in the introductory stage of the product life cycle

Question 14

Joe Bergerson makes and sells maple racks for cooling cakes and cookies. Joe knows that it costs $15 to make one rack, and he wants to earn a 25 percent profit on each rack. Which approach to pricing is Joe most likely to use?

Accepted Answer

A)  demand-based pricing 
B)  target costing 
C)  cost-plus pricing 
D)  yield management pricing 
E)  value pricing

Question 15

Which of the following consumer trends is a response to the frequent reports of terrorism and political unrest?

Accepted Answer

A)  buying time 
B)  vertical integration 
C)  eating greener 
D)  shopping for control 
E)  keystoning

Question 16

Which of the following is true about noncumulative quantity discounts?

Accepted Answer

A)  They encourage large single orders. 
B)  They encourage a strong relationship between buyer and seller. 
C)  They are based on a total quantity purchased within a set time period. 
D)  They typically involve giving the buyer a credit to use against future orders. 
E)  They encourage small, regularly spaced orders.

Question 17

Explain how prestige products may relate to some customers' feelings of self-worth. What is an example of a prestige product?

Accepted Answer

The answer of Explain how prestige products may relate to...

Question 18

What is payment pricing and why is it effective?

Accepted Answer

The answer of What is payment pricing and why is...

Question 19

When consumers are unable to judge the quality of a product through examination or prior experience, they usually do which of the following?

Accepted Answer

A)  Make a price-quality inference. 
B)  Depend on an internal reference price. 
C)  Assess the fair price. 
D)  Experience an assimilation effect. 
E)  Experience a price-placebo effect.

Question 20

Mark believes he should pay more than $49.95 for a motel room; this price is his internal reference price.

Accepted Answer

A) True 
 B)False

Exam 10: Price: What Is the Value Proposition Worth

Which of the following is an example of a variable cost for an amusement park?

Often consumers base their perception of price on what they perceive to be the customary or ________.

When setting prices, a leading manufacturer of nutritional supplements decided to institute a pricing strategy that would support a five percent increase in sales over the next three years. What type of pricing objective has the company set?

A company in an industry characterized by monopolistic competition is most likely to adopt status quo pricing objectives.

In a market with ________, the market consists of many buyers and a few sellers who are likely to have similar pricing.

Valeo Fashions has just introduced a new line of fashion dresses for teens. The line will initially enter the market at high prices in a ________ strategy.

Which of the following is an advantage of using cost-based pricing methods?

Bayer AG agreed to pay $46 million as part of a law settlement for conspiring with Archer-Daniels-Midland (ADM) to keep prices of citric acid at a certain level. These two international companies were guilty of ________.

A(n) ________ occurs when customers decide that two different brands of pain reliever have the same product quality because they have basically the same product characteristics and similar prices.

Price leadership strategies provide a legal way for firms to agree on prices without ever explicitly coordinating rates.

From a marketer's point of view, price lining is a way to do which of the following?

Consumers usually perceive higher-priced products as ________.

Joe Bergerson makes and sells maple racks for cooling cakes and cookies. Joe knows that it costs $15 to make one rack, and he wants to earn a 25 percent profit on each rack. Which approach to pricing is Joe most likely to use?

Which of the following consumer trends is a response to the frequent reports of terrorism and political unrest?

Which of the following is true about noncumulative quantity discounts?

Explain how prestige products may relate to some customers' feelings of self-worth. What is an example of a prestige product?

What is payment pricing and why is it effective?

When consumers are unable to judge the quality of a product through examination or prior experience, they usually do which of the following?

Mark believes he should pay more than $49.95 for a motel room; this price is his internal reference price.