Unformatted text preview: tandards of living are a function of purchasing power, which is
measured by comparing income to the relative cost of a set standard of goods and services in
different geographic areas.
KEY: CB&E Model Customer OBJ: 04-5 TOP: AACSB Reflective MSC: BLOOMS Comprehension 12. Inflation is a measure of the decrease in the value of money, expressed as the percentage
reduction in value since the previous year.
TOP: AACSB Reflective Thinking REF: 47
KEY: CB&E Model Pricing MSC: BLOOMS Knowledge
13. An economic recession increases demand for products and services.
A recession is a period of economic activity characterized by negative growth, which reduces
demand for goods and services.
KEY: CB&E Model Strategy OBJ: 04-5 TOP: AACSB Reflective MSC: BLOOMS Comprehension 14. Basic research attempts to develop new or improved products.
This is applied research. Basic research attempts to expand the frontiers of knowledge but is not
aimed at a specific, pragmatic problem.
KEY: CB&E Model Research OBJ: 04-6 TOP: AACSB Reflective MSC: BLOOMS Knowledge 15. Champion Lyte is a sugar-free sports drink. In developing the product, its manufacturer
thoroughly studied the legal restrictions on the drink’s ingredients, packaging, manufacturing, and
labeling and has abided by all such restrictions. In this way, the manufacturer of Champion Lyte
drinks conducted its examination of all political and legal factors that might affect the product’s
Legal restrictions govern decisions in ALL areas of the marketing mix, not just in the areas the
KEY: CB&E Model Strategy OBJ: 04-7 TOP: AACSB Reflective MSC: BLOOMS Application 16. Marketers need a thorough understanding of the laws established by the federal government, state
governments, and regulatory agencies.
TOP: AACSB Reflective Thinking
MSC: BLOOMS Comprehension REF: 49
KEY: CB&E Model Strategy 17. The Sherman Act of 1890 establishes protection for trademarks.
The Lanham Act of 1946 establishes protection of trademarks.
KEY: CB&E Model Strategy OBJ: 04-7 TOP: AACSB Reflective MSC: BLOOMS Knowledge 18. After Hal Li purchased and installed a wood-burning stove to heat his family home, the stove
caught fire and damaged much of the house. He believes the stove had inadequate insulation. Li
should voice his concerns to the Federal Trade Commission.
The Consumer Product Safety Commission is designed to protect the health and safety of
consumers in and around their homes.
KEY: CB&E Model Product OBJ: 04-7 TOP: AACSB Reflective MSC: BLOOMS Application 19. The competitive environment of a business encompasses the number of competitors the firm must
face, the relative size of these competitors, regulatory agencies, and the degree of
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- Marketing, AACSB Reflective, CB&E Model Strategy, CB&E Model