Question 1

Consumer spending sinks to its lowest level during an economic depression.

Accepted Answer

During an economic depression, consumer confidence typically declines, leading to reduced spending as individuals and families cut back on expenses due to fears of unemployment and financial instability, resulting in consumer spending reaching its lowest levels.

Question 2

During the recession stage of the business cycle, consumers have enough money to spend, but caution often restraints their willingness to buy.

Accepted Answer

During a recession, consumers often have less money to spend due to job losses and reduced income, leading to decreased willingness to buy.

Question 3

The competition among Amtrak, Hertz, and Delta Airlines for the travelers' dollar is considered indirect competition because these services can be substituted for one another.

Accepted Answer

Amtrak (train service), Hertz (car rental), and Delta Airlines (air travel) offer different modes of transportation, but they compete for the same customers looking to travel, making their competition indirect as they provide alternative solutions for the same need.

Question 4

In addition to planning for change, marketers must set goals to meet the concerns of customers, employees, shareholders, and members of the general public.

Accepted Answer

Marketers must consider the concerns and expectations of various stakeholders, including customers, employees, shareholders, and the general public, to ensure their strategies are comprehensive and socially responsible. This approach helps in building brand loyalty, trust, and a positive corporate image.

Question 5

The industry deregulation phase has focused on increasing the competition in industries such as utilities and financial services.

Accepted Answer

Industry deregulation phases often aim to increase competition by reducing barriers to entry and limiting monopolistic practices, particularly in sectors like utilities and financial services, to foster a more competitive and efficient market environment.

Question 6

During an 18-month period, sales of Mercedes automobiles, Carnival Cruise vacations, and Florida real estate increased by at least 20 percent. A marketer might deduce that the business cycle is in the late stages of recovery or experiencing a period of economic prosperity.

Accepted Answer

Increases in sales of luxury goods and services, such as Mercedes automobiles, Carnival Cruise vacations, and Florida real estate, often indicate that consumers have higher disposable incomes, which is typical during the late stages of economic recovery or a period of economic prosperity.

Question 7

During an economic recession, marketers look to emphasize value in their offerings by reducing prices in order to help consumers stretch their budget dollars.

Accepted Answer

During economic recessions, consumers often have less disposable income, leading marketers to emphasize value in their offerings, frequently by reducing prices, to appeal to consumers' need to stretch their budgets further.

Question 8

The success or failure of a product is independent of the competitive environment.

Accepted Answer

The success or failure of a product is significantly influenced by the competitive environment, as competitors' actions, market saturation, and consumer preferences directly impact a product's performance in the market.

Question 9

The antitrust laws in the United States were designed to protect the interests of organizations having monopoly positions.

Accepted Answer

Antitrust laws in the United States were designed to protect competition and prevent monopolies, ensuring a fair marketplace for consumers and businesses alike.

Question 10

The first phase of federal regulation of business was aimed at protecting competitors and included the Robinson-Patman Act, passed in the 1930s.

Accepted Answer

The answer of The first phase of federal regulation of...

Question 11

Maros, an agricultural biotechnology company, is the sole supplier of genetically engineered seeds and controls 84 percent of the market share for genetically modified crops. This is an example of a monopoly.

Accepted Answer

Maros controls a majority of the market share for genetically modified crops, indicating a monopoly.

Question 12

The governmental regulations that affect marketing practices are mainly for advertising and distribution, and do not place any restrictions and prohibitions on the design and packaging of products.

Accepted Answer

Governmental regulations can also affect the design and packaging of products, including requirements for safety, labeling, environmental impact, and consumer protection.

Question 13

The deregulation movement has ended total monopoly protection for most utilities.

Accepted Answer

Deregulation has opened up markets previously dominated by monopolies, particularly in sectors like telecommunications and energy, allowing for competition and reducing total monopoly protection.

Question 14

The gross domestic product (GDP) of a nation does not take into consideration the goods and services that are exported to foreign markets.

Accepted Answer

GDP measures the total value of all goods and services produced within a country's borders, including those that are exported to foreign markets. Exports are added to GDP, while imports are subtracted.

Question 15

Marketing theory would define Starbucks, Caribou Coffee, and Dunkin' Donuts as indirect competitors because some coffee drinkers are particular about the brands they purchase.

Accepted Answer

Starbucks, Caribou Coffee, and Dunkin' Donuts are considered direct competitors because they operate within the same industry (coffee and fast-food industry) and target similar customer segments with similar products (coffee and related beverages).

Question 16

The Federal Trade Commission was established to facilitate trade by removing tariffs and other trade barriers among Canada, Mexico, and the United States.

Accepted Answer

The Federal Trade Commission (FTC) was established in 1914 to prevent unfair methods of competition and unfair or deceptive acts or practices in the marketplace, not to facilitate trade among Canada, Mexico, and the United States.

Question 17

The decision of whether or not to compete should be based on a firm's resources, objectives, and expected profit potential.

Accepted Answer

A firm should consider its resources, objectives, and expected profit potential to make an informed decision about entering a competition, ensuring alignment with its strategic goals and capabilities.

Question 18

Public and private consumer interest groups and self-regulatory organizations are part of the legal environment.

Accepted Answer

Consumer interest groups and self-regulatory organizations influence regulations and policies, thus forming part of the legal environment.

Question 19

The most direct form of competition occurs among marketers of dissimilar products.

Accepted Answer

The most direct form of competition occurs among marketers of similar or identical products, as they compete for the same customer base.

Question 20

Sears offers discount coupons and lowers prices on 1,000 items in the store in order to generate sales. This is most likely to occur during an economic recession.

Accepted Answer

During an economic recession, businesses like Sears often lower prices and offer discount coupons to stimulate consumer spending and generate sales, as consumers are typically more cautious with their spending during such times.

Quiz 3: The Marketing Environment, Ethics, and Social Responsibility