Multiple Choice
Identify the
letter of the choice that best completes the statement or answers the question.
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1.
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A
demand curve which drops in stages is called:
a. | A normal curve. | c. | A stepped demand curve. | b. | A price demand
curve. | | | | |
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2.
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What
is value in use?
a. | The cost savings made by the customer by buying a specific
product. | c. | The cost of the
product spread over the period in which the product will be used. | b. | The cost of the
product to the customer. | | | | |
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3.
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The
costs associated with changing from one product to another are called:
a. | Changeover
costs. | c. | Overhead
costs. | b. | Switching costs. | | | | |
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4.
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Which
of the following is NOT a source of experience curve effects?
a. | Technological
improvements. | c. | Education.
| b. | Learning. | | | | |
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5.
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Setting prices by calculating all the costs then adding on the profit margin is
called:
a. | Cost-plus
pricing. | c. | Calculation
pricing. | b. | Profit-based pricing. | | | | |
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6.
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What
is polycentric pricing?
a. | Setting prices at different rates according to negotiation
centres. | c. | Pricing against
many cost centres. | b. | Allowing local managers to set prices.
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7.
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Setting the prices of goods which one division of the firm buys from another is
called:
a. | Divisional
pricing. | c. | Transfer
pricing. | b. | Demand pricing. | | | | |
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8.
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What
does FOB stand for?
a. | Fixed order book. | c. | Funded over breakeven. | b. | Free on board.
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9.
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What
is a documentary letter of credit?
a. | A letter from a bank confirming that the buyer has the cash to
pay for the goods. | c. | A letter from a
bank guaranteeing to pay the vendor provided the conditions of the sale are met.
| b. | A letter from a
vendor confirming that the buyer will be offered credit. | | | | |
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10.
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What
is open-account trading?
a. | The vendor gives the buyer credit.
| c. | The vendor
agrees to open its bank accounts to the buyer, as a sign of good faith. | b. | The buyer agrees
to a long-term stream of purchases. | | | | |
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