Chapter 4: Economic and socioeconomic forces

One area of interest to marketers is the manner in which consumers allocate____ ( after- tax personal income ) between purchases of essential and nonessential goods. 

• 1. discretionary income

• disposable income

• the total income

• the total per capita consumption expenditure

_______ is the amount of income left after paying taxes and making essential purchases.

• discretionary income

• disposable income

• the total income

• the total per capita consumption expenditure

_____ consumer expenditures eliminate differences in relative prices, marketers use these data to analyse how the composition of consumption changes with the level of development. 

Answer explanation

PPP= Purchasing Power Parity

a measure of the price of specific goods in different countries and is used to compare the absolute purchasing power of the countries' currencies

The percentage differences within a consumption category________ with the consumption expenditures per capita.

• 1. increase

• decrease

• vary

• 2. do not vary

If income is 5000 USD, tax is 10%, so disposable income is 4500  USD, and if essential goods cost 200 USD, then discretionary income is ______

• 4000 USD

• 4300 USD

• 4400 USD

• 3900 USD

Answer explanation

discretionary income = disposable income - the cost of essential goods 

= 4500 - 200 = 4300 USD

According to The World Bank, the populations living in high-income econiomies use nearly seven times as much  commercial energy per capita as do people in _______

• developing economies

• industrialized nations

• developed nations

• 1. urban areas.

If income is 2000 USD, tax is 7%. So, the disposable income is_______

• 140 USD

• 1500 USD

•  1760 USD

• 1860 USD

Answer explanation

 disposable income = 2000 - 2000x 7% = 1860 USD

The percentages spent on transport and communication, consumer durables, health care, and other consumption  by households of developed nations are_____ the percentage of those in developing nation.

• twice

• three

• four

• the same as

A member of the family has income worth 15,000 VND /a month, and income tax is 15 %. The amount of income spent on essential purchases are 8,000 VND. Calculating the discretionary income. 

•  12, 750 VND

• 2,250 VND

• 11,000 VND

•  4,750 VND

A member of the family has income worth 15,000 VND /a month, and income tax is 15 %. The amount of income spent on essential purchases are 8,000 VND. Calculating the disposable income. 

• 12, 750 VND

•  2,250 VND

•  11,000 VND

• 4,750 VND

Answer explanation

 the disposable income = 15,000 - 15,000x15% = 12,750 VND

        the discretionary income = 12,750 - 8,000 = 4,750 VND