Consumer Surplus and Willingness to Pay quiz #5 Flashcards
Consumer Surplus and Willingness to Pay quiz #5
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Why is pricing important? It determines consumer surplus, demand, and a firm's revenue. Which of these groups responds to the incentive of a lower price? Price-sensitive consumers. What is the amount of money for which an item sells in the competitive marketplace? Market price. Customers do not buy products for what reason? If the perceived benefit is less than the price. What role does the profit incentive play when there is a surplus of a good? It encourages producers to lower prices to increase sales and reduce surplus. Which of the following is a reason that people don’t save money? They prefer immediate consumption over future savings. Which two of the following are reasons that firms like to advertise during the Super Bowl? Large audience reach and increased brand awareness. Which statement shows that money is a 'measure of value'? Money allows comparison of the value of different goods and services. What is perhaps the most important responsibility that consumers have? To make informed choices and use resources wisely. Which type of product's sales would be most likely to benefit most from using coupons? Grocery items or frequently purchased consumer goods. What function helps businesses decide on the products to produce or sell? Market research and analysis of consumer demand. Why are consumers powerful? Their preferences and willingness to pay determine what is produced. Which of the following statements is true of cultural factors that influence consumer behavior? Cultural values and norms shape consumer preferences and willingness to pay. What is the most likely reason marketers utilize a price bundling strategy? To increase perceived value and consumer surplus. Which consumer purchase is the result of environmental influences? Buying reusable bags due to environmental awareness. To get more bang for your buck, what should you do? Seek products that offer higher utility relative to their price. Which of the following are economic benefits of maintaining good relationships with customers? Increased loyalty, repeat purchases, and positive word-of-mouth. Which of the following would be a final good? A television purchased by a household. Which of the following statements best describes the significance of competition? Competition leads to lower prices and increased consumer surplus. Which of the following are components of price? (check all that apply.) List price, discounts, and additional fees. Why do consumer advocates advise against using alternative financial services? They often have high fees and can reduce consumer surplus. What is a simple way of describing market value calculations? Comparing willingness to pay with the actual price paid. Which of the following statements is true regarding consumers? Consumers seek to maximize their utility and surplus when making purchases. Which type of product is usually purchased on the spur of the moment? Impulse goods. Which of the following focuses on a product category rather than a specific brand? Generic advertising. Which of the following is not a possible outcome once a consumer is satisfied? Returning the product due to dissatisfaction. What do the income effect and substitution effect explain? How changes in price affect consumer choices and demand. Which of the following best describes the consumer price index? A measure of the average change in prices paid by consumers over time. What does it mean when a firm engages in market differentiation? It offers products with unique features to increase willingness to pay. Which best explains why buying a house is more beneficial than renting? Homeownership can build equity and provide long-term value. What are two primary factors that affect buying motives? Needs and wants. Which of the following is the least important in the sales process? Ignoring customer feedback. What can be thought of as the wealth that trade creates for consumers in a market? Consumer surplus. You buy lunch every day of the week at a local café. What is most likely true about this purchase? You value the lunch at least as much as the price you pay. When are consumers most apt to forgo evaluating alternatives? When making routine or low-cost purchases. Which of the following situations would be a poor use of personal selling? Selling low-cost, frequently purchased items. How does information provided by the government influence consumer decisions? It helps consumers make informed choices and avoid unsafe products. What four aspects of a purchase affect a consumer's decision to take action when dissatisfied? Product importance, cost, ease of complaint, and expected outcome. Which situation represents a consumer-driven pricing action? A store lowering prices in response to decreased demand. The views on certain products can be expressed in which of the following? Consumer reviews and ratings.
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