Strayer Bus402 Week 7 quiz 6

Question 1

A firm sells small-ticket items to their regular customers on customer charge accounts and then bills the customers each month. This type of credit arrangement is called:

Answer

trade credit.

charge account credit.

installment credit.

debit card credit.

2 points

Question 2

________ is a technique which greatly simplifies the pricing function by setting the same price for items with similar characteristics.

Answer

Odd pricing

Leader pricing

Price lining

Geographical pricing

2 points

Question 3

When a small business is faced with price competition from a much larger competitor, it should consider:

Answer

going head-to-head on prices by lowering its cost structure.

using non-price competition by offering value added service.

make rapid, continual price changes to keep the competition off balance.

move to a premium price strategy by offering higher scale goods and services.

2 points

Question 4

When developing a marketing approach to pricing, business owners must:

Answer

establish prices that are compatible with their customers' expectations and what they are willing to pay.

compete solely on price.

establish prices that are compatible with their customers' expectations and add a certain percentage to it.

establish prices that are compatible with their customers' expectations and subtract a certain percentage to it.

2 points

Question 5

Probably the most important consideration a manufacturer has when setting the final price of its new exclusive perfume is:

Answer

the perfume's production cost.

competitor's prices.

the image the company wants to create for the scent in the customer's mind.

choosing between odd pricing and price lining.

2 points

Question 6

________ costing includes only those costs that vary directly with the volume of an item produced.

Answer

Absorption

Break-even

Indirect

Direct

2 points

Question 7

Even in the short run, a small business must set the price of a product at least equal to the ________ costs (per unit), or it must shut down.

Answer

fixed

variable

total

invariable

2 points

Question 8

In ________ pricing, a type of geographical pricing, a small firm charges customers located in different territories different prices for the same products.

Answer

FOB factory

uniform delivered

zone

price lining

2 points

Question 9

Most service firms base their prices on:

Answer

fairly stable pricing policies.

the cost of the service plus an estimate of the value they add in delivering the service.

market surveys on their respective industries.

an hourly basis for services rendered.

2 points

Question 10

Which of the following is correct?

Answer

Sales — variable costs — fixed costs = contribution margin

Total revenue — variable costs = contribution margin

Total revenue — fixed costs = contribution margin

Total revenue — profit = contribution margin

2 points

Question 11

Small business owners get into trouble when determining their price floor when they:

Answer

focus on what the customer will pay.

assume their costs are the same as their competitors'.

begin to track financial ratios to determine what they are doing.

use the price floor as the minimum price in their acceptable price range.

2 points

Question 12

________ is a technique in which a small firm marks down the price of a popular item below its normal price in an effort to increase customer traffic and to boost sales of other items.

Answer

Odd pricing

Leader pricing

Price lining

Suggested retail pricing

2 points

Question 13

When pricing products, it is important to remember that:

Answer

there is an ideal price that customers will pay for a given product or service.

once the acceptable price range is found, prices should not be changed again.

pricing is more an intuitive than a quantitative process.

a customer orientation in price setting is most important.

2 points

Question 14

________ include(s) the unit cost of a manufacturer's product under an absorption costing system.

Answer

Opportunity costs

Depreciation

Insurance

Variable costs

2 points

Question 15

A customer who purchases a television from Ace Appliance Store and pays for it in 36 monthly payments is using:

Answer

trade credit.

charge account credit.

installment credit.

debit card credit.

2 points

Question 16

Key to successfully establishing an international location is:

Answer

securing the necessary licenses to operate in the foreign country.

finding the right person to manage the international office.

making a substantial investment in personnel.

being able to speak the language of the foreign country.

2 points

Question 17

Currency: inflation rate, availability, controls, stability of exchange rate; Balance of payments; Per capita income and distribution; Disposable income and expenditure patterns are components of:

Answer

demographic/physical environment.

social/cultural environment.

economic environment.

market access.

2 points

Question 18

A relatively easy way of getting into international marketing, which currently handles about 10% of all U.S. exports, is through ________ who act as distributors in foreign countries for domestic companies of all sizes.

Answer

foreign licensees

international franchises

joint ventures

export trading companies

2 points

Question 19

When collecting for the sale of foreign goods, a small business will use a ________, an agreement between their bank and the foreign buyer's bank that guarantees payment.

Answer

bank draft

foreign sales agreement

tariff voucher

letter of credit

2 points

Question 20

The first step to becoming a truly global company is to:

Answer

establish an export program.

find a joint venture partner.

begin to think globally, taking on a global attitude toward a business.

hire motivated, multilingual managers.

2 points

Question 21

The type of companies that are an important channel of foreign distribution for small companies just getting started in international trade or for those lacking the resources to assign their own people to foreign markets are referred to as:

Answer

export management companies.

joint ventures.

sole proprietorships.

export trading companies.

2 points

Question 22

A(n) ________ is a business that buys and sells products in a number of countries, offering a range of services–importing, exporting, shipping, distributing, and others–to their clients.

Answer

foreign joint venture

export trading company

foreign licensee

resident buying office

2 points

Question 23

An entrepreneur wants to move into international markets but can't quite figure out how to do it. He's not clear on his target market or how to approach it but he knows he needs to "go global." This entrepreneur is experiencing which barrier to international trade?

Answer

Financing

Information

Cultural

Attitude

2 points

Question 24

________ involves a transaction in which a company selling goods in a foreign country agrees to promote investment and trade in that country.

Answer

Countertrade

Export

Import

Bartering

2 points

Question 25

The most important ingredient in the recipe for a successful joint venture is:

Answer

choosing the right country or region.

generating sufficient capital to pursue the venture.

choosing the right partner.

hiring efficient employees to carry out the venture.

2 points

Question 26

A ________ is a document the seller draws on the buyer, requiring the buyer to pay the face amount (the purchase price of the goods) either on sight (a sight draft) or on a specified date (a time draft) once the goods are shipped.

Answer

Bank draft

Letter of Credit

COD

Line of Equity

2 points

Question 27

________ is/are one of the trading intermediaries a small company can use to enter the global marketplace.

Answer

Export merchants

Joint ventures

International franchising

Establishing international locations

2 points

Question 28

The simplest and least expensive way to conduct international business is through:

Answer

foreign licensees.

the World Wide Web.

joint ventures.

trade intermediaries.

2 points

Question 29

The tax that a government puts on products that are imported into a country is called a(n):

Answer

embargo.

tariff.

quota.

non-tariff barrier.

2 points

Question 30

A type of non-tariff barrier to trade that consists of selling large quantities of products in foreign countries below cost is referred to as:

Answer

dumping.

clearance selling.

bartering.

exporting.