Marketing Final Exam

Pricing price escalation ans b this is the definition

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Unformatted text preview: definition of purchasing power. Another way to think of purchasing power is income minus the cost of living (i.e., expenses). PTS: 1 REF: 47 Thinking KEY: CB&E Model Customer OBJ: 04-5 TOP: AACSB Reflective MSC: BLOOMS Knowledge 47. The higher your _____, the higher your purchasing power: a. gross income b. social class c. disposable income d. cost of living e. inflation index ANS: C Purchasing power is measured by comparing income to the relative cost of a set standard of goods and services in different geographic areas. It is aligned with income minus a standard set of expenses. Assuming a constant income, the higher the cost of living (the expenses), the lower the purchasing power is. PTS: 1 REF: 47 Thinking KEY: CB&E Model Customer OBJ: 04-5 TOP: AACSB Reflective MSC: BLOOMS Comprehension 48. All of the following are taken into account in a cost of living index EXCEPT: a. income b. housing c. food and groceries d. health care e. entertainment ANS: A In general, a cost of living index takes into account housing, food and groceries, transportation, utilities, health care, and miscellaneous expenses such as clothing, services, and entertainment. PTS: 1 REF: 47 Thinking KEY: CB&E Model Customer OBJ: 04-5 TOP: AACSB Reflective MSC: BLOOMS Analysis 49. _____ is a measure of the decrease in the value of money, expressed as the percentage reduction in value since the previous year. a. Inflation b. Recession c. d. e. Depression Consumer break-even Price escalation ANS: A This is the definition of inflation. PTS: 1 REF: 47 Thinking KEY: CB&E Model Pricing OBJ: 04-5 TOP: AACSB Reflective MSC: BLOOMS Knowledge 50. A period of economic activity characterized by negative growth, which reduces demand for goods and services, is called a(n): a. stagnation b. inflation c. recession d. price escalation e. parity ANS: C This is the definition of a recession. PTS: 1 REF: 47 Thinking KEY: CB&E Model Pricing OBJ: 04-5 TOP: AACSB Reflective MSC: BLOOMS Knowledge 51. The main product for Zamperla Industries is gondola cars for amusement park rides and ski lifts. Its marketing department constantly monitors trends in the external environment that might affect the firm. Which economic factor may pose a major threat to this company? a. Few competitors in this industry b. Technological improvements that are automating production of cars c. A recession d. Increasing interest in the environment and recycling e. Existing legislation requiring licensing of all amusement park rides ANS: C A recession is a period of economic activity characterized by negative growth, which reduces demand for goods and services. PTS: 1 REF: 47 Thinking KEY: CB&E Model Pricing OBJ: 04-5 TOP: AACSB Reflective MSC: BLOOMS Application 52. Shabby Chic fashion boutique has responded to economic trends by placing an emphasis on improving the quality of merchandise it offers, improving customer service, and reducing its cost of goods sold because consumers are not shopping as much a...
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