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WorksheetsEconomics Quiz
Total questions: 114
Worksheet time: 1hrs 6mins
When the demanded goods quality is equal to supplied good's quantity, then____.
when you see a shortage
when you see a surplus
when you see the government is investing in the market
none of these
The shape of the demand curve is_____.
downward sloping
upward-sloping
vertical
horizontal
When the restaurant that serves fast food increases in the number, this leads to_____.
An increase in fast-food meal supply
the growth in fast-food meal demand
a growth is seen in the demand for substitutes for such meals
increase in the rate of such meals
Many of the supply curve____ due to increases in marginal cost.
is vertical
is horizontal
has a positive slope
has a negative slope
When one moves up with the supply curve, which one of these metrics is not a part of the constant factor?
the seller numbers
the commodity prices
expected prices in the future
the resources cost that was used for commodity production
What will be the supply when the price change is by 1%, and the change in supply is by 2%?
indeterminate
elastic
inelastic
static
What will happen if the rate of complementary goods has a downfall or there's an increase in consumer income?
the products demand curve shifts towards the right
the products supply curve shifts toward the right
the products supply curve shifts toward the right
the products demand curve shifts towards the right
While we draw the demand curve, which of these assumptions are there?
the substitute price should not change
the curve for demand should be linear
there should be no change in commodity price
the demanded quantity does not change
The relation of ______ is by the law of demand.
the quantity and price of commodity
the price and income of commodity
demand quantity and demand-supply of commodity
income and demand quantity of a commodity
For the demand for durable goods, the elasticity is____.
zero
greater than the unity
equal to the unity
less than the unity
The demand elasticity turns out to be _____when the product price comes down by 10% and the demand for the product goes up by 30%.
3
30
13
d.10
The demand for commodity turns out to be ____ when the demanded quantity of commodity does not respond to change in its prices.
inelastic
unit elastic
elastic
perfectly inelastic
Which one out of the mentioned options is not a cause of change or shift in demand for any product?
when the substitute price is changed
when there is a change in product price
when a change in consumer income is seen
none of these
When for a commodity, the elasticity of demand is low, the product______?
Is a necessity
is a luxury
is a little important in overall budget
none of these
A price increase price will result in_____ when the product demand is perfectly inelastic.
a rise in total income from a certain product
a downfall in the demanded quantity of product
no changes in total income from a certain product
a reduction in total income from a certain product
When the total revenue from product and the price moves in the same direction, then the demand is________.
elastic
perfectly elastic
unrelated
inelastic
The supply curve will be_____ when the supply elasticity is greater than one.
horizontal
vertical
touching y-axis
passing through the origin
Can an increase in demand for certain products make the supply curve shift in any direction?
the curve will move in the right direction
no effect on the supply
A change in the slope of a supply curve
the curve will move in the left direction
We can see the upward slope of a firm supply curve due to____.
consumers see a positive relationship between the quantity and price
the production expansion leads to the use of inferior inputs
the cost of production of extra units of output will rise beyond a point
none of these
Without changing the price_____ moves to a rise in commodity supply.
fall in the supply
decrease in the supply
the rise in the supply
expansion in the supply
In a certain year, the workers experienced bad weather. If the rest of the factors remain the same, the supply curve of that product will move in which direction?
leftward
upward
rightward
none of these
If the supply curve of the market moves to the right side, which of these will explain the shift at best?
making a commodity production at low cost by introducing a new technique
increase in the raw material rate
government introducing a tax on that certain product
none of the above
Out of these scenarios, which one will not change the curve of demand for a certain product?
when we see a reduction in the amount of raw material of that thing or product
when a study says, the product is not good for health
when we see another campaign for goods
change in consumers' income
Out of these scenarios, which won't lead to a demand change for the product?
a switch in consumer taste
increase in consumer income
changes in the price
none of these
In July 2012, a company was giving 6000kgs of flour at the market value of rupee 40 per kg. But in august 2012, the flour supply was reduced to 5500 kg at the market value of rupee 30kg. This change in flour supply is_____.
less elastic
more elastic
perfectly elastic
perfectly inelastic
The demand curve that's horizontal and parallel to the x-axis shows the elasticity of demand to be____.
infinite
zero
greater than zero
equals to one
Which of these doesn't lead to a change in the demand curve?
advertisement
price of product
income
related product price
An increase in income in the countries that are developing leads the curve of demand shift to _____.
up
down
left
right
Coffee and tea are ____ types of goods.
complimentary
substitute
normal
inferior
Tell the marginal revenue of a company that sells an item at a rate of rupee 20 and the elasticity rate of demand for that item is (-) 4.
15
19
5
30
Mention the responsible factor in demand for any natural resource?
increase in human population
scientific advancement
environmental pollution
use of biodegradable resources
Name a phenomenon in which the consumer tends to be exclusive and different by asking for less commodity as many of the people consume the same.
substitution effect
price effect
bandwagon effect
snob effect
Which of the following factors can lead to a rightward shift in the demand curve?
none of these
improvement in consumer preferences
increase in the price of substitutes
decrease in consumer income
What happens to the demand for a product when consumer preferences shift towards it?
it decreases
it becomes perfectly elastic
it remains unchanged
it increases
When the price of a complementary good rises, the demand for the related good will_____.
remain unchanged
decrease
increase
become elastic
This is a pricing strategy recommended for products that have become obsolete:
Survival pricing
Geographic pricing
Price skimming
A competitive pricing strategy is good when the price objectives are status quo oriented.
True
False
Coffee pods for Dolce Gusto coffee machine are relatively inexpensive, considering the price of the machine. The pricing strategy used for the pods as auxiliary products is:
Product bundle
Captive product pricing
Creative pricing
All of the options
An appliance store reduces the price of its products when customers pay in cash, instead of in monthly payments. This is an example of:
Volume payment
Prompt payment
Promotions
A movie theater sells its tickets at lower prices to students and seniors. This is an example of:
Prompt payment
Price discrimination
Price skimming
Stability pricing
This strategy usually occurs between intermediaries and consists of reductions in the list price offered to buyers in payment for marketing functions that these buyers will perform, such as storing, promoting and selling the products.
Trade discounts
Survival pricing
Supply and demand pricing
Discounts
Fast food restaurants such as McDonalds use this pricing strategy for selling combos of burgers, fries and a beverage at a lower price than the total price of the items sold individually. This is an example of:
Discounts
Stability pricing
Price discrimination
Product-bundle pricing
In this strategy, all competitors respond to supply and demand, in order to set a market price that reduces shortages and surpluses.
Competitive pricing
Survival pricing
Supply and demand pricing
None of the options
A clothing store puts all its products at 50% discount, due to the change of season. This is an example of:
Survival pricing
Price discrimination
Block pricing
Promotion
The price skimming consists of setting high prices and reducing them over time to maximize the long-term profit.
True
False
Price varies by attribute such as a location or by Customer Segment is ________ degree of Price Discrimination
First
Second
Third
Fourth
Price Discrimination cannot persist under the following
Perfect Competition
Monopolistic
Monopoly
Oligopoly
Unlike perfect competition, a monopolist can make abnormal profits in the long run.
True
False
Sweezy' s Model explains the concept of price rigidity relating to the following market forms
Oligopolistic Market
Perfect Competition Market
Monopoly Market
Monopolistic Competition
Which of the following statements is in correct?
Under monopoly there is no difference between a firm and industry
A monopolist may restrict the output and raise the price
Free entry and exit in a Monopoly Market
Product differenciation is peculiar to monopolistic competition
Pure oligopoly is based on the _____ products.
Differentiated
Homogeneous
Unrelated
none of the above
A monopolist is a
Price maker
Price taker
Price adjuster
none of the above
Under monopoly, the degree of control over price is:
none
same
very considerable
none of the above
They are the curves that represents various combinations of two inputs that produce the same amount of output.
Isoquant
Long run curve
Short run curve
Marginal cost curve
The ratio of the percentage change in quantity demanded to the percentage change in price; measures the responsiveness of quantity demanded to changes in price.
Elasticity of demand
Price elasticity
Income elasticity
Cross elasticity
Large No of firms with homogeneous products is a feature of
Oligopoly
Perfect competition
Monopoly
Monopolistic
A single producer, without close substitute is a feature of
Monopoly
Monopolistic
Oligopoly
Perfect competition
Many firms with real or perceived product differentiation is a feature of
Monopoly
Monopolistic
Oligopoly
Perfect competition
Few firms with little or no product differentiation is a feature of
Monopoly
Monopolistic
Oligopoly
Perfect competition
Manufacturing: tea, toothpastes, soaps, TV sets, shoes, refrigerators etc is the nature of product prevalent in which industry
Monopoly
Monopolistic
Oligopoly
Perfect competition
Kinked demand curve is associated with
Monopoly
Monopolistic
Oligopoly
Perfect competition
Long run cost curve is also called envelope curve
True
False
The price skimming consists of setting high prices and reducing them over time to maximize the long-term profit.
True
False
Which statement best describes "Price"?
The cost of producing items
The amount customers are charged for items
The profit earned from selling items
What is price skimming?
An initially high price charged to customer which will reduce over time
An initially low price charged to customer which will increase over time
A steady price charged to customer regardless of product age
What is an advantage of price skimming?
Gains market share
Covers costs and breaks even
Allows an organisation to make the largest profit possible
What is Promotional pricing?
When a business offers different prices to different customers
When a business reduces price to below production cost to clear stock
When a business offers a short term special offer such as buy one get one free to gain interest and increase sales
What is meant by Psychological pricing strategy?
Items are offered at an uneven number to appear cheaper encouraging sales (eg £9.99)
Items are sold using a special promotional offer which is brightly coloured and attracts attention
Items are sold at production cost price to attract customers into the store and increase purchases
What sets the floor for product prices?
consumer perceptions of the product's value
product costs
competitors' strategies
advertising budgets
Which of the following processes does value-based pricing reverse?
high-low pricing
everyday low pricing
cost-based pricing
good-value pricing
Under oligopolistic competition the market consists of ________.
a single dominant seller
numerous small sellers
many buyers and sellers who trade over a range of prices rather than a single market price
only a few large sellers
________ refers to a measure of the sensitivity of demand to changes in price.
Price elasticity
A demand curve
Price-value equation
Marginal utility
________ pricing uses buyers' perceptions of value as the key to pricing.
Customer value-based
Cost-based
Time-based
Markup
Quantity of payment or compensation given by one party to another in return for goods and services.
Revenue
Price
Sales
Profit Margin
Different markets have different level of price sensitivity. Hence, a one-price-fits all market would not be recommended.
Pricing in different markets
Nature of the market and demand
Price elasticity Demand
Break-even point
Is the level of income that is desired by the company.
Fixed Costs
Variable Costs
Profit Margin
Revenue
What is Loss Leader pricing?
A product is sold at production cost price
A product is sold at less than cost price
A product is sold to make a small profit
What is meant by Psychological pricing strategy?
Items are offered at an uneven number to appear cheaper encouraging sales (eg £9.99)
Items are sold using a special promotional offer which is brightly coloured and attracts attention
Items are sold at production cost price to attract customers into the store and increase purchases
_____________________ are the one you wouldn't necessarily expect to be interested in your business and could be attracted because of other reasons.
Target Customers
Primary Customers
Secondary Customers
Virtual Customers
By knowing the buyers' behaviours, I can...
Better project my sales target and manage inventory
Know what is important for my customers and better increase customer loyalty
Make improvements to the product design and function
Better market my products or services to the customer
Which of the following is not a factor affecting pricing?
Competitors' pricing
Weather
Production cost & distribution cost
Brand positioning (Luxury brand/ down-to-earth brand)
Examples of time based pricing are...
Goods with shorter shelf life will be priced cheaper to reduce wastage
Cheaper food and drinks during happy hours
Airline ticket pricings during peak and non peak period
Hotel pricing on weekends vs weekdays
Printers are usually charged at a lower price, however accompanying ink top-ups are charged a premium price. This is know as _________________
Premium Pricing
Bundle Pricing
Passive Pricing
Captive Product Pricing
Mc Donald charges a premium pricing for it's outlet at Garden by the Bay. This pricing strategy is know as
Premium Pricing
Product Options Pricing
Geographical Pricing
Economy
What is the definition of PRICE ?
The amount of money a consumer must spend in order to get a product.
A value of services determined by money
Benefits of product payed
The amount of product a customer gained
The different terms used to reference pricing is :
The charge
The fare
The price point
The value
Which of the following is NOT an internal factor that affects price ?
Consumer
Product differentiation
Marketing-mix strategies
Organization
Which are EXTERNAL FACTORS ?
Buyer
Nature market and demand
Environment factors
Background market
What is the general pricing approach
cost-based pricing
value-based pricing
break-event pricing
competition-based pricing
What is cost-based pricing ?
cost+markup + final price
cost production + cost manufacturing + final price
cost manufacturing + cost distribution + final price
What type of agreement that competitors agree to fix a price at their advantage?
Price Encouragement
Price Fixing
________ uses buyers' perceptions of what a product is worth, not the seller's cost, as the key to pricing.
Value-based pricing
Target return pricing
Variable costs
Price elasticity
Product image
When there is price competition, many companies adopt ________ rather than cutting prices to match competitors.
pricing power
value-added pricing strategies
fixed costs
price elasticity
image pricing
Which of the following presents the strongest reason that markup pricing generally does NOT make sense?
Sellers earn a fair return on their investment.
By tying the price to cost, sellers simplify pricing.
When all firms in the industry use this pricing method, prices tend to be similar.
This method ignores demand.
With a standard markup, consumers know when they are being overcharged.
With target costing, marketers will first ________ and then ________.
build the marketing mix; identify the target market
identify the target market; build the marketing mix
design the product; determine its cost
use skimming pricing; use penetrating pricing
determine a selling price; target costs to ensure that the price is met
Each of the following economic factors can have a strong impact on a firm's pricing strategy EXCEPT ________.
an economic boom
the reseller's reaction to price changes
an economic recession
inflation
interest rates
Which of the following would NOT support a market-skimming policy for a new product?
The product's quality and image must support its higher price.
Enough buyers must want the products at that price.
Competitors are not able to undercut the high price.
Competitors can enter the market easily.
The cost of producing a smaller volume is not so high that it negates the advantage of charging more per unit.
Companies involved in deciding which items to include in the base price and which to offer as options are engaged in ________ pricing.
product bundle
optional-product
captive-product
by-product
skimming
________ is the amount of money charged for a product or service.
Experience curve
Demand curve
Price
Wage
Salary
________ uses buyers' perceptions of what a product is worth, not the seller's cost, as the key to pricing.
Value-based pricing
Target return pricing
Variable costs
Price elasticity
Product image
When there is price competition, many companies adopt ________ rather than cutting prices to match competitors.
pricing power
value-added pricing strategies
fixed costs
price elasticity
image pricing
Which of the following presents the strongest reason that markup pricing generally does NOT make sense?
Sellers earn a fair return on their investment.
By tying the price to cost, sellers simplify pricing.
When all firms in the industry use this pricing method, prices tend to be similar.
This method ignores demand.
With a standard markup, consumers know when they are being overcharged.
With target costing, marketers will first ________ and then ________.
build the marketing mix; identify the target market
identify the target market; build the marketing mix
design the product; determine its cost
use skimming pricing; use penetrating pricing
determine a selling price; target costs to ensure that the price is met
Each of the following economic factors can have a strong impact on a firm's pricing strategy EXCEPT ________.
an economic boom
the reseller's reaction to price changes
an economic recession
inflation
interest rates
Which of the following would NOT support a market-skimming policy for a new product?
The product's quality and image must support its higher price.
Enough buyers must want the products at that price.
Competitors are not able to undercut the high price.
Competitors can enter the market easily.
The cost of producing a smaller volume is not so high that it negates the advantage of charging more per unit.
Companies involved in deciding which items to include in the base price and which to offer as options are engaged in ________ pricing.
product bundle
optional-product
captive-product
by-product
skimming
It is most typical for producers who use captive-product pricing to set the price of the main product ________ and set ________ on the supplies necessary to use the product.
low; low markups
high; low markups
low; high markups
high; high markups
moderately; moderate markups
The New Age Gallery has different admission prices for students, adults, and seniors. All three groups are entitled to the same services. This form of pricing is called ________.
time-based pricing
location pricing
customer-segment pricing
revenue management pricing
generational pricing
What type of pricing is being used when a company temporarily prices its product below the list price or even below cost to create buying excitement and urgency?
segmented pricing
psychological pricing
referent pricing
promotional pricing
dynamic pricing
The Internet offers ________, where the price can easily be adjusted to meet changes in demand.
captive pricing
dynamic pricing
basing-point pricing
price bundling
cost-plus pricing
Consumers perceptions of the product's value set the ceiling; demand set a floor to a product's price.
TRUE
FALSE
Overhead cost is another term for variable cost.
TRUE
FALSE
