Question 1

When the city of Dallas buys iPads for its restaurant inspectors to use during their visits, the purchase from Apple would be considered
A)a regulatory sale.
B)a reseller purchase.
C)a government purchase.
D)a producer purchase.
E)an institutional sale.

Accepted Answer

The purchase is being made by a government agency, the city of Dallas, for its employees to use in performing their official duties. Therefore, it is a government purchase.

Question 2

Which of the following would be considered an institutional buyer?
A)Walmart
B)The Environmental Protection Agency
C)Apple Inc.
D)The United Way
E)City of Greenville

Accepted Answer

The answer of Which of the following would be considered...

Question 3

Because retailers have to be concerned with product selection, price, and space, they often evaluate products on the basis of
A)their markup.
B)sales per square foot of selling area.
C)how many of the product they can fit in a certain amount of space.
D)profit per dollar of selling price.
E)the reliability of the supplier.

Accepted Answer

Retailers evaluate products based on sales per square foot of selling area because it helps them maximize their profits by identifying the most profitable products and allocating space accordingly. By measuring sales per square foot, retailers can determine which products are selling well and which ones may need to be restocked or removed from the shelves. This measurement also allows retailers to analyze the performance of their physical stores and make necessary adjustments to improve their layouts and product offerings.

Question 4

Martin's Produce Stand buys produce from area farmers, marks the merchandise up to a price that includes some profit, and then sells the fruit and vegetables to the people in and around Townsville. Martin's would be classified as part of a ____ market.
A)consumer
B)producer
C)government
D)reseller
E)wholesaler

Accepted Answer

Martin's Produce Stand buys from producers (farmers) and sells to end consumers, making it a reseller market.

Question 5

Individuals and business organizations that purchase products for the purpose of making a profit either by using the products to produce other products or by using them in their operations are classified as ____ markets.
A)consumer
B)institutional
C)producer
D)government
E)reseller

Accepted Answer

The description given in the question is a clear indication of a producer market, where the buyers are businesses that use the purchased product in their operations or manufacturing processes to produce other products or services to make a profit. The other options such as consumer, government, and reseller markets do not fit the description given in the question. Institutional markets typically consist of schools, hospitals, and other organizations that purchase goods and services to serve their members or clients.

Question 6

Motorola buys silicone, which is used in its chip-making process. Motorola produces microchips for use within a wide variety of products for other firms, such as Ford, GM, and Samsung. Motorola is a buyer in a(n) ____ market.
A)producer
B)government
C)reseller
D)construction
E)institutional

Accepted Answer

Motorola is buying silicone to produce microchips, which are components used in the manufacturing of products by other companies. This makes it a participant in a producer market, where businesses purchase goods and services that are used in the production of other goods and services.

Question 7

Quick Tools, Inc., purchases hammers, bolts, and other hardware items from a variety of manufacturers and sells them to hardware stores at a price that includes a profit for Quick Tools, Inc. The company would be part of what type of business market?
A)Reseller
B)Producer
C)Consumer
D)Government
E)Supply

Accepted Answer

Quick Tools, Inc. is purchasing products from manufacturers and selling them for a profit to hardware stores, indicating that they are a reseller.

Question 8

Which of the following is not an example of a producer market member?
A)Buyers of raw materials
B)Buyers of semifinished items used to make other products
C)Buyers of finished items used to make other products
D)Buyers of services used for their operations of their organizations
E)Buyers of finished products that intend to resell them for a profit

Accepted Answer

Buyers of finished products that intend to resell them for a profit are not producer market members as they are not involved in the production process. They are typically considered wholesalers or distributors who purchase finished products from producers and then resell them to retailers or end-users.

Question 9

Retailers like Target and Kmart are considered to be members of which business market?
A)Reseller
B)Customer
C)Producer
D)Institutional
E)Services

Accepted Answer

Retailers like Target and Kmart purchase products from producers/manufacturers and resell them to customers. Therefore, they are considered members of the reseller market or intermediary market.

Question 10

Which of the following statements about reseller markets is false?
A)Resellers are concerned with the level of demand for the product.
B)Resellers are not concerned with how much space the product takes up as long as it has a high price.
C)Resellers want producers to be able to supply adequate quantities of the product.
D)Resellers are concerned with the availability of technical and promotional assistance from the producer.
E)Resellers are concerned with the markup percentage they can get on the product.

Accepted Answer

Resellers are concerned with many factors including demand, availability, technical and promotional assistance, and markup percentage. However, they are also concerned with how much space the product takes up, as they need to consider the cost and practicality of storing and transporting the product. Therefore, statement B is false.

Question 11

Individuals and business organizations that buy finished goods and resell them to make a profit without changing the physical characteristics of the product are classified as ____ markets.
A)consumer
B)institutional
C)producer
D)government
E)reseller

Accepted Answer

This question is referring to reseller markets, which are also known as intermediary markets or distribution channels. Resellers are businesses that buy products from producers or wholesalers and sell them to consumers or other businesses, without making any changes to the products themselves. Therefore, the best choice is E, reseller.

Question 12

A friend of yours starts his own business. He would like to expand his client base to include the government, but he believes his small business would be ignored. Based on your knowledge from the text, you tell him
A)that he's absolutely right, the government doesn't deal with small businesses.
B)although the government will deal with small businesses, he will never make a profit off a government contract.
C)that any government, federal, state, or local would laugh at the size of his business.
D)the government rarely considers new suppliers when making purchasing decisions.
E)the government buys products from all sizes of business, but there is some red tape.

Accepted Answer

The government buys products from all sizes of business, but there may be some red tape involved. Small businesses can sell to the government, and there are even programs in place to encourage government contracts for small businesses. However, the government procurement process can be lengthy and bureaucratic, so it is important for your friend to research the requirements and procedures for selling to the government.

Question 13

About what percentage of the annual U.S. gross domestic product is government spending?
A)2 percent
B)10 percent
C)20 percent
D)40 percent
E)50 percent

Accepted Answer

Government spending typically accounts for around 40 percent of the annual U.S. gross domestic product (GDP), covering federal, state, and local government expenditures.

Question 14

When charitable organizations such as the American Cancer Society, Second Harvest Food Bank, and the Red Cross make purchases for goods and services to use in their daily operations, they would be considered to be _______ buyers.
A)corporate
B)government
C)institutional
D)producer
E)nonprofit

Accepted Answer

Charitable organizations such as the American Cancer Society, Second Harvest Food Bank, and the Red Cross are nonprofit organizations and are therefore considered institutional buyers.

Question 15

Institutional markets are
A)intermediaries who resell goods to make a profit.
B)federal and state government units.
C)state or local government units.
D)consumers who buy products for their own use.
E)organizations that seek nonbusiness goals.

Accepted Answer

The answer of Institutional markets are
A)intermediaries who resell goods to...

Question 16

Which type of business market tends to have the most complex buying procedures?
A)Reseller
B)Institutional
C)Retailer
D)Government
E)Producer

Accepted Answer

Government markets tend to have the most complex buying procedures due to the various regulations and policies that must be followed, the involvement of multiple decision-makers, and the need for extensive documentation and contract negotiations.

Question 17

Business markets are typically divided into four categories. These categories are
A)retailers, wholesalers, services, and nonprofit firms.
B)producer, manufacturer, reseller, and government.
C)producer, reseller, government, and institutional.
D)manufacturer, wholesaler, retailer, and services.
E)reseller, retailer, government, and institutional.

Accepted Answer

The four categories of business markets are typically classified as producer (makes products for their own use), reseller (buys and sells products without significantly changing the form of the goods), government (federal, state, and local authorities purchase goods and services for public benefit), and institutional (organizations that provide services to people in their care). Option A is incorrect as it mixes up market types with business types. Option B is incorrect as producer and manufacturer are essentially the same thing, reseller and government are not business types, and there is no category for services. Option D is incorrect as it includes services as a category but does not accurately classify all types of businesses. Option E is incorrect as it mixes up market types with business types and does not accurately classify all types of businesses.

Question 18

What are the two ways governments make purchases?
A)Cash or credit
B)Contacting previous suppliers and bids
C)Bids and negotiated contracts
D)Lottery system and contract negotiations
E)Request for new purchases and recurring orders

Accepted Answer

Governments typically make purchases through a bidding process or negotiated contracts. This ensures transparency and fairness in the procurement process. Cash or credit, lottery system, and recurring orders are not standard practices in government purchasing. While contacting previous suppliers may be a part of the procurement process, it is not enough to ensure fair competition among suppliers.

Question 19

____ buy products from manufacturers and then resell the products to other firms in the distribution system.
A)Retailers
B)Producers
C)Distributors
D)Warehouses
E)Wholesalers

Accepted Answer

Wholesalers buy products from manufacturers in large quantities and then sell them to retailers or other businesses in smaller quantities. Therefore, wholesalers are the best choice for the given description.

Question 20

The state of Colorado is preparing to buy a large quantity of frozen orange juice for use in a large school district. Fresh Squeeze, Inc. is in the citrus juice business but has never sold to the government market. To have a chance at getting this order, Fresh Squeeze's first step must be to
A)make a presentation appointment with the state.
B)quote prices to the purchasing department.
C)advertise in the capital city.
D)negotiate with the state.
E)secure a slot on the list of qualified bidders.

Accepted Answer

To be eligible to sell to the government, Fresh Squeeze, Inc. would need to secure a slot on the list of qualified bidders. The government typically has a list of approved vendors that it uses for procurement, so Fresh Squeeze would need to go through a bidding process and meet certain qualifications to be added to the list. Once on the list, the company could then quote prices to the purchasing department and negotiate with the state to try to win the order. However, without being on the list of qualified bidders, Fresh Squeeze wouldn't even have a chance at getting the order.

Quiz 7: Business Markets and Buying Behavior

When the city of Dallas buys iPads for its restaurant inspectors to use during their visits, the purchase from Apple would be considered

Which of the following would be considered an institutional buyer?

Because retailers have to be concerned with product selection, price, and space, they often evaluate products on the basis of

Martin's Produce Stand buys produce from area farmers, marks the merchandise up to a price that includes some profit, and then sells the fruit and vegetables to the people in and around Townsville. Martin's would be classified as part of a ____ market.

Individuals and business organizations that purchase products for the purpose of making a profit either by using the products to produce other products or by using them in their operations are classified as ____ markets.

Motorola buys silicone, which is used in its chip-making process. Motorola produces microchips for use within a wide variety of products for other firms, such as Ford, GM, and Samsung. Motorola is a buyer in a(n) ____ market.

Quick Tools, Inc., purchases hammers, bolts, and other hardware items from a variety of manufacturers and sells them to hardware stores at a price that includes a profit for Quick Tools, Inc. The company would be part of what type of business market?

Which of the following is not an example of a producer market member?

Retailers like Target and Kmart are considered to be members of which business market?

Which of the following statements about reseller markets is false?

Individuals and business organizations that buy finished goods and resell them to make a profit without changing the physical characteristics of the product are classified as ____ markets.

A friend of yours starts his own business. He would like to expand his client base to include the government, but he believes his small business would be ignored. Based on your knowledge from the text, you tell him

About what percentage of the annual U.S. gross domestic product is government spending?

When charitable organizations such as the American Cancer Society, Second Harvest Food Bank, and the Red Cross make purchases for goods and services to use in their daily operations, they would be considered to be _______ buyers.

Institutional markets are

Which type of business market tends to have the most complex buying procedures?

Business markets are typically divided into four categories. These categories are

What are the two ways governments make purchases?

____ buy products from manufacturers and then resell the products to other firms in the distribution system.

The state of Colorado is preparing to buy a large quantity of frozen orange juice for use in a large school district. Fresh Squeeze, Inc. is in the citrus juice business but has never sold to the government market. To have a chance at getting this order, Fresh Squeeze's first step must be to