Question 1

Increases in discretionary income can occur as a result of all of the following except which?
A) an increase in gross income.
B) a decrease in taxes.
C) an increase in disposable income.
D) a decrease in housing costs.
E) an increase in interest rates.

Accepted Answer

An increase in interest rates could lead to an increase in the cost of borrowing, which can decrease discretionary income. All other options listed can increase discretionary income.

Question 2

Miela had an excellent year as a junior auditor in 2018, earning $97,000. She paid $37,000 for necessities such as mortgage, food, and clothing. Her state and federal income taxes totaled $24,000. What was her discretionary income?
A) $36,000
B) $60,000
C) $73,000
D) $97,000
E) Not enough information is provided to calculate her discretionary income.

Accepted Answer

Discretionary income is calculated by subtracting taxes and necessities from total income: $97,000 - $37,000 - $24,000 = $36,000.

Question 3

Inventions or innovations from applied science or engineering research are referred to as
A) scientific discoveries.
B) theoretical development.
C) technology.
D) patents.
E) dynamic engineering.

Accepted Answer

Inventions or innovations from applied science or engineering research are commonly referred to as technology.

Question 4

Recent data on consumer expenditures indicate that the savings rate of U.S. consumers has
A) declined to 13 percent.
B) remained flat at 0.5 percent.
C) fluctuated minimally around 2 percent.
D) risen to 5.5 percent.
E) exploded to nearly 10 percent.

Accepted Answer

According to the question, the recent data on consumer expenditures indicate that the savings rate of U.S. consumers has risen to 5.5 percent. Therefore, option D is the correct choice. Options A, B, C, and E are incorrect based on the information provided.

Question 5

The Department of Labor monitors consumer expenditures through its annual
A) Consumer Price Index.
B) Consumer Confidence Index.
C) Consumer Expenditure Survey.
D) Index of Consumer Sentiment.
E) National Consumer Spending Assessment.

Accepted Answer

The Department of Labor monitors consumer expenditures through its annual Consumer Expenditure Survey, which collects information on the buying habits of American consumers.

Question 6

Technological advances can sometimes replace or substitute for existing products in a relatively short period. Apple Pay for iPads and iPhones is most likely to replace or substitute for
A) financial market trades.
B) digital video recorders.
C) credit cards and cash.
D) printed catalogs.
E) online banking.

Accepted Answer

Apple Pay is a mobile payment and digital wallet service that allows users to make payments using their iPads and iPhones, making it a substitute for traditional payment methods like credit cards and cash.

Question 7

Technology is defined as
A) any device or process based on scientific discoveries that are less than one year old.
B) any mechanical device used in the production or distribution of a product.
C) scientific findings that are used now or are able to generate a profit.
D) ideas or concepts that will one day be translated into usable devices, mechanisms, or processes.
E) the inventions or innovations from applied science or engineering research.

Accepted Answer

Technology is defined as inventions or innovations derived from applied science and engineering research. Option E best captures this definition. The other options, A, B, C, and D do not fully encompass the complexity of technology and its broader applications.

Question 8

A local pet supplies boutique had a good year with rising revenues and reduced operating costs resulting in personal income for the owner of nearly $150,000. One-third of that went to local, state, and federal income taxes and another third went to pay for a home mortgage, car payments, food, clothing, and other necessities. What is the remaining third called?
A) gross income
B) bonus income
C) discretionary income
D) disposable income
E) profit

Accepted Answer

Discretionary income is the portion of an individual's income that is left for spending, investing, or saving after taxes and necessities have been paid.

Question 9

Technological advances can replace or substitute for existing products in a relatively short period. IBM's Watson is a likely replacement or substitute for
A) TV broadcasts.
B) digital video recorders.
C) a customer service representative.
D) printed publications.
E) plastic credit cards.

Accepted Answer

IBM's Watson is a cognitive computing system that can answer questions in natural language and learn from experience, making it a potential substitute for customer service representatives.

Question 10

Income used to buy luxury items, such as a voyage aboard Cunard's Queen Mary 2, is referred to as
A) gross income.
B) disposable income.
C) surplus income.
D) wealth income.
E) discretionary income.

Accepted Answer

Discretionary income is the amount of an individual's income that is left for spending, investing, or saving after taxes and necessities are paid. It is often used to purchase luxury items.

Question 11

After paying high taxes and covering the costs of high expenses for necessities, if a consumer's ________ is still high, she may be able to take advantage of the luxurious vacation travel opportunities like staying at the Ritz Carlton in New York City's Central Park.
A) savings rate
B) gross income
C) taxes
D) discretionary income
E) disposable income

Accepted Answer

Discretionary income is the amount of an individual's income that is left for spending, investing, or saving after taxes and necessities are paid. It is the income available for luxury spending, such as vacations.

Question 12

The portion of one's income that remains after paying for taxes and necessities is referred to as
A) net income.
B) discretionary income.
C) disposable income.
D) household income.
E) gross income.

Accepted Answer

Discretionary income is the income that remains after paying for taxes and necessities. It is the money that can be saved or spent on non-essential items such as entertainment, vacations, or hobbies.

Question 13

According to the textbook, several new technologies are expected to have dramatic impacts on marketing. Among those cited are
A) biotechnology, green technologies, natural user interfaces, and social networks.
B) neuron technology, lithium batteries, cloud computing, and wireless power.
C) crowdsourcing, genomics, QR codes, and weather manipulation.
D) the Internet of Things, autonomous vehicles, wearable technology, and artificial intelligence.
E) nanotechnology, autobots, cloud computing, and electric cars.

Accepted Answer

The textbook highlights the Internet of Things, autonomous vehicles, wearable technology, and artificial intelligence as technologies with significant potential to impact marketing. These technologies are transforming how businesses interact with consumers and manage data.

Question 14

Recently, the number of people who attended music concerts, plays, and other live entertainment increased because they had the ________ to enjoy these activities.
A) gross income
B) bonus income
C) profit
D) disposable income
E) discretionary income

Accepted Answer

Discretionary income is the money that remains after paying for taxes and necessities.Discretionary income is used for luxury items such as theater and concert tickets.

Question 15

The Department of Labor monitors consumer expenditures through its annual Consumer Expenditure Survey. In the most recent report, consumers spent the largest proportion of their income on which of these?
A) education
B) housing
C) vacations
D) entertainment
E) investments

Accepted Answer

According to the most recent Consumer Expenditure Survey by the Department of Labor, consumers spent the largest proportion of their income on housing expenses. This includes rent, mortgage payments, property taxes, and utilities. Therefore, option B is the best choice.

Question 16

Spending on which of the following would be considered discretionary?
A) health care
B) housing
C) furniture
D) clothing
E) transportation

Accepted Answer

The answer of Spending on which of the following would...

Question 17

Leigh and Rob prepared a household budget in an attempt to manage their money better. They prepared the following list: Monthly income (after taxes) = $4,500; Monthly expenses (necessities), which include rent, $550; auto loan, $250; student loan, $200; savings, $500; food, $200 = $1,700; Amount left over = $2,800 (income less necessary expenses). The remaining $2,800 is their
A) gross income.
B) personal income.
C) disposable income.
D) discretionary income.
E) profit.

Accepted Answer

The remaining $2,800 is their discretionary income, which is the money left over after paying for necessary expenses (rent, loans, savings, and food). This money can be used for non-essential or optional categories such as entertainment, hobbies, vacations, etc. Therefore, it is their discretionary income.

Question 18

This year the Shafer family has dined at nice restaurants almost four times a week. Between raises received by Mr. and Mrs. Shafer, their family income rose 11 percent, while the cost of living rose by 4 percent and property taxes went up 5 percent in their community. As a result, the family eats outside the home more often now, compared to dining out only a few times a month a few years ago. This reflects
A) an increase in the number of fine restaurants during times of economic upswing.
B) a reaction to an increase of discretionary income.
C) a significant drop in disposable income since there was a negative gain in income.
D) a rise in deflation.
E) a shift from investing to spending.

Accepted Answer

The Shafer family has more discretionary income due to raises, so they are eating out more often.

Question 19

Leah had an excellent year as a salesperson in 2015, earning $98,000. She paid $38,000 for necessities such as mortgage, food, and clothing. Her state and federal income taxes totaled $24,000. What was her disposable income?
A) $36,000
B) $74,000
C) $60,000
D) There is not enough data provided to calculate her discretionary income.

Accepted Answer

Disposable income is the amount of money left after taxes and other necessary expenses have been paid. In this case, Leah's disposable income is $98,000 - $38,000 - $24,000 = $36,000.

Question 20

Discretionary income refers to
A) the money deducted from a person's paycheck to pay for federal, state, and local taxes.
B) the total amount of money made by a single individual during his or her lifetime.
C) the money a consumer has left after paying taxes to use for necessities such as food, shelter, clothing, and transportation.
D) the money that is spent for necessities or charitable causes that is exempt from taxation.
E) the money that remains after paying for taxes and necessities.

Accepted Answer

Discretionary income refers to the money that remains after paying for taxes and necessities. This discretionary income can be used for non-essential expenses such as entertainment, travel, and luxury goods.

Quiz 3: Understanding the Marketing Environment, Ethical Behavior, and Social Responsibility

Increases in discretionary income can occur as a result of all of the following except which?

Miela had an excellent year as a junior auditor in 2018, earning $97,000. She paid $37,000 for necessities such as mortgage, food, and clothing. Her state and federal income taxes totaled $24,000. What was her discretionary income?

Inventions or innovations from applied science or engineering research are referred to as

Recent data on consumer expenditures indicate that the savings rate of U.S. consumers has

The Department of Labor monitors consumer expenditures through its annual

Technological advances can sometimes replace or substitute for existing products in a relatively short period. Apple Pay for iPads and iPhones is most likely to replace or substitute for

Technology is defined as

Technological advances can replace or substitute for existing products in a relatively short period. IBM's Watson is a likely replacement or substitute for

Income used to buy luxury items, such as a voyage aboard Cunard's Queen Mary 2, is referred to as

After paying high taxes and covering the costs of high expenses for necessities, if a consumer's ________ is still high, she may be able to take advantage of the luxurious vacation travel opportunities like staying at the Ritz Carlton in New York City's Central Park.

The portion of one's income that remains after paying for taxes and necessities is referred to as

According to the textbook, several new technologies are expected to have dramatic impacts on marketing. Among those cited are

Recently, the number of people who attended music concerts, plays, and other live entertainment increased because they had the ________ to enjoy these activities.

The Department of Labor monitors consumer expenditures through its annual Consumer Expenditure Survey. In the most recent report, consumers spent the largest proportion of their income on which of these?

Spending on which of the following would be considered discretionary?

Leah had an excellent year as a salesperson in 2015, earning $98,000. She paid $38,000 for necessities such as mortgage, food, and clothing. Her state and federal income taxes totaled $24,000. What was her disposable income?

Discretionary income refers to