41. Buyers of GTB automobiles perceive such cars as more luxurious and more prestigious than other automobiles and are willing to pay more for these cars. This is an example of the _____ effect.
42. James has invested in a health insurance plan that pays for half of his medical expenses. He is not very price-sensitive and does not hesitate to opt for expensive medial treatments. This is an example of the _____ effect.
43. Which of the factors affecting customers’ sensitivity to price is Duracell emphasizing when it claims in television ads that its batteries last longer than its competitors’?
A. Sunk-investment effect
B. Unique-value effect
C. Inventory effect
D. Shared-cost effect
44. A hotel in Hawaii charges its hotel guests premium prices for food at its in-house restaurant. As the guests are unaware of lower-priced restaurants in the area, they are often seen to be less price-sensitive than the locals. Which of the factors that affect customers’ sensitivity to pricebest explains the lower price-sensitivity of outsiders?
A. Shared-cost effect
B. Sunk-investment effect
C. Substitute-awareness effect
D. End-benefit effect
45. The price elasticity of demand is the:
A. degree of responsiveness of demand to a price change.
B. price sensitivity of the consumers in a market.
C. change in product price following a change in price of raw materials.
D. change in pricing relative to competitors’ pricing.
46. Which of the following is the formula for determining price elasticity of demand?
A. Percentage change in quantity demanded divided by percent change in price
B. Percent change in price divided by percentage change in quantity demanded
C. Percentage change in quantity demanded divided by percent change in investment
D. Percent change in investment divided by percentage change in quantity demanded
47. If a company institutes a 3% price decrease and the result is a 6% increase in the quantity demanded, what is the price elasticity of demand for the product?
48. Which of the following would be a part of the fixed costs of a firm?
A. Product packaging materials
B. Labor required to produce a unit of the product
C. Executive salaries
D. Costs of materials
49. Which of the following would be a part of the variable costs for a firm?
A. product packaging materials
B. interest on debt
C. executive salaries
D. rent on buildings
50. The fixed cost per unit of a product:
A. remains constant per unit regardless of how many units are produced.
B. is the sum of marketing mix and variable costs for a given level of production.
C. declines as a firm produces and sells more of the product in a given period.
D. primarily includes costs of retailers and other distributors.