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Indicate whether the statement is true or false.
1. A person’s purchasing power is usually referred to as disposable income.
a. True
b. False
2. Asian Americans, who represent only six percent of the U.S. population, have the lowest average family income of all
groups.
a. True
b. False
3. Component lifestyles decrease the complexity of consumers’ buying habits.
a. True
b. False
4. Age is the primary determinant of the person’s earning potential.
a. True
b. False
5. Teens command negligible amount of buying power.
a. True
b. False
6. The younger Millennials will create a significant amount of economic growth in the U.S.
a. True
b. False
7. Gross domestic product is the total market value of all final goods and services produced during a period of time.
a. True
b. False
8. Global competition is decreasing with increase in population.
a. True
b. False
9. The term Hispanic encompasses people of many different backgrounds.
a. True
b. False
10. Gen Xers tend to be frugal and seek value when making purchases.
a. True
b. False
11. Demographic characteristics are strongly related to consumer buying behavior in the marketplace.
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a. True
b. False
12. A mobile moment is the point in time at which a customer pulls out a mobile device to get immediate access to the
information that he or she wants.
a. True
b. False
13. A target market is a group of people or organizations for which an organization designs, implements, and maintains a
marketing mix intended to meet the needs of that group, resulting in mutually satisfying exchanges.
a. True
b. False
14. Demography is one of the controllable variables in the external environment.
a. True
b. False
15. The management of a firm has utmost control over the competitive environment confronting it.
a. True
b. False
16. George purchased a new hair dryer. However, the hair dryer sparked and the coil caught fire. He felt that the product
was dangerous to use. In this case, George should voice his concerns to the Federal Trade Commission.
a. True
b. False
17. Component lifestyle refers to choosing products and services that conform to traditional stereotypes.
a. True
b. False
18. An inflation is defined as occurring when the gross domestic product falls for two consecutive quarters.
a. True
b. False
19. The locally dominant Spanish-speaking Hispanic community is referred to as the primal 45-Latino society.
a. True
b. False
20. Unlike television, social media enable firms to create conversations with customers and establish meaningful
connections.
a. True
b. False
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21. The Bureau of Competition provides information and holds conferences and workshops for consumers, businesses,
and policy makers on competition issues for market analysis.
a. True
b. False
Indicate the answer choice that best completes the statement or answers the question.
22. The CAN-SPAM Act:
a. prohibits commercial e-mailers from using false addresses and presenting false or misleading information.
b. requires fast-food chains to open their facilities to health inspection at least once every quarter.
c. requires verifiable parental consent before a Web site can collect information from children.
d. allows commercial e-mailers to charge consumers a fee to opt out of receiving further email.
23. Unlike Gen Yers, Gen Xers:
a. were least affected by the Great Recession.
b. have higher average incomes.
c. spend the least on housing compared to other cohorts.
d. are not considered as attractive market segment for family-oriented products.
24. Magnira Corp., a technological firm, recently acquired a smaller firm abroad. The Federal Trade Commission looked
into the acquisition and found that Magnira Corp. used unfair means to acquire the business. In this case, which of the
following bureaus was responsible for reviewing the acquisition?
a. The Bureau of Consumer Protection
b. The Bureau of Economics
c. The Bureau of Competition
d. The Bureau of Consumer Privacy
25. Which of the following statements is true of the values held by tweens?
a. They are concerned about crime, climate change, and their health.
b. They prefer and value traditional media over social media.
c. They are influenced by traditional advertising, sales reps, and word-of-mouth recommendations.
d. They forgo games and are moving toward entrepreneurship.
26. Rin Toys, a toy manufacturing company, received a notice from the Consumer Product Safety Commission to stop
manufacturing and recall its entire infant sleep-aid toy collection that had already been sold. According to the notice, the
toy emits radio waves that are harmful to infants. In this scenario, a(n) _____ factor affected Rin Toys’s business.
a. social
b. economic
c. legal
d. political
27. Which of the following statements is true of the primal 45-Latino society?
a. It is formed by Asian communities.
b. The primal culture followed in the societies tends to be regional.
c. Hispanic Millennials born in the U.S. acculturate to the primal 45-Latino society .
d. It shares the same characteristics as other societies in the U.S.
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28. _____ is charged with enforcing regulations against selling and distributing adulterated, misbranded, or hazardous
food and drug products.
a. The Association for Prohibition of Adulteration
b. The General Food Regulations
c. The Consumables Protection Bureau
d. The Food and Drug Administration
29. Peter is conducting research to develop an engine that could run on water. His research is aimed at formulating a
combustion process that could be used in commercial vehicles so that vehicles could run on water. Peter’s research is an
example of _____.
a. experimental research
b. applied research
c. controlled research
d. basic research
30. Which of the following statements is true of the attitude of teens in the U.S.?
a. Most teens prefer to shop online than in stores.
b. According to a survey taken by Piper Jaffary, teens continue to seek peer affirmation.
c. Teens spend more on food than any other cohort group.
d. Most teens are influenced by traditional advertising, sales reps, and word-of-mouth recommendations than any
other cohort.
31. Zappy Toys, a toy manufacturing company, opened one of its stores in Zuell, a quiet suburban area. The suburban area
is populated mostly with older individuals and retirement homes. The company expected to sell lots of toys. However, the
people living in Zuell did not seem interested in the store and rarely visited it. In this scenario, Zappy Toys failed to
understand the impact of _____ on its business.
a. social factors
b. social media
c. political factors
d. inflation
32. Alex purchased a battery-operated drill. Due to a manufacturing defect, the drill overheated and exploded when he
used it for the first time. Therefore, he lodged a complaint against the firm that manufactured the drill with the Consumer
Product Safety Commission (CPSC). In this case, which of the following is most likely to happen?
a. The CPSC can fine the offending firm up to $500,000.
b. The CPSC will reduce the prices of the drills of the offending firm in the market.
c. The CPSC will introduce changes to the drills of the offending firm in the market.
d. The CPSC has no power to sentence the officers involved in the case.
33. According to a Quirk’s study, which of the following statements is true of global kids?
a. They value traditional media more than any other cohort.
b. They have ranked “getting a good education” near the top of socially desirable attributes.
c. They are a larger cohort than the combined population of Millennials and baby boomers.
d. They are still not familiar with the use of social media and mobile technologies.
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34. Laelle Corp., a technological firm, promotes its products through various social media platforms. In this case, which
of the following statements is true?
a. Laelle Corp. uses the social media platforms as a one-way communication similar to network television.
b. Laelle Corp. creates conversations with its customers and establishes meaningful connections.
c. Social media is rarely used by Laelle Corp.’s customers.
d. The platforms display content generated by Laelle Corp. but not its customers.
35. Who among the following has the highest purchasing power?
a. Peter, whose monthly income and cost of living are $6000 and $3500, respectively
b. Gabriel, whose monthly income and cost of living are $2000 and $1700, respectively
c. Percy, whose monthly income and cost of living are $7000 and $6800, respectively
d. Stan, whose monthly income and cost of living are $9500 and $10200, respectively
36. Juarn is a software company. It encourages its employees to work on their own software and codes and has set aside
around five hours every week for them to do this. Which of the following approaches is Juarn using to stimulate
innovation?
a. Talking to early adopters
b. Using marketing research
c. Building scenarios
d. Catering to entrepreneurs
37. In the context of the American demographic profile, which of the following statements is true of Hispanic
Millennials?
a. The majority of Hispanic Millennials are of Puerto Rican descent.
b. Millennial women are the primary decision makers in Hispanic households.
c. The Hispanic Millennial population in the U.S. is steadily declining.
d. Hispanic Millennials make a quarter of the Hispanic population in the U.S.
38. Unlike people who belong to Generation X, baby boomers:
a. do not use social media or other technologies to buy products.
b. tend to be influenced more by traditional advertising and word-of-mouth recommendations.
c. spend less on gifts, personal care products, medical care, food away from home, and entertainment.
d. graduated from college during the Great Recession.
39. Ben goes to a gas station. After filling gas in his car, he finds an old receipt that he had received at another gas station.
After reading the receipt, he realizes that gas prices were much lower last year. In this scenario, Ben is most likely paying
more money to fill gas as a result of _____.
a. inflation
b. recession
c. immigration policies
d. layoffs
40. Which of the following strategies can help business firms stimulate innovation?
a. Hiring employees who have low risk tolerance
b. Letting employees know that they must fear failure and should not attempt anything that might fail
c. Instructing managers to use micromanagement techniques
d. Using teams of writers to build scenarios of opportunities and threats
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41. The Federal Trade Commission’s Bureau of Competition _____.
a. promotes restraint of trade among business firms
b. encourages monopolization and agreements between competitors
c. promotes anti-competitive strategies
d. seeks out and challenges anti-competitive conduct in the marketplace
42. Business firms can stimulate innovation by:
a. hiring employees who have a low risk tolerance.
b. letting employees know that they have the freedom to fail.
c. using micromanagement techniques.
d. talking to late adopters.
43. Which of the following scenarios is an example of basic research?
a. Jeremy, a social activist, is researching ways to improve the quality of life of physically challenged people.
b. Xerome, an engineer, is trying to find an alternative fuel that would be cost effective and environmental friendly.
c. Sasha, a student, is working on his new science project.
d. Laila, an engineer, is trying to rectify the malfunctions of her newly invented engine.
44. Conformity, a value that strongly influenced attitudes and lifestyles during United States’ first 200 years, emphasizes
that:
a. success would come to anyone who got an education, worked hard, and played by the rules.
b. every person should stand on his or her own two feet.
c. hard work, dedication to family, and frugality were moral and right.
d. no one should expect to be treated differently from anybody else.
45. Madison is an accountant in a large multinational company. She is in her early thirties and still has a sizeable student
loan to pay. She prefers using social media for news and communication but does not mind the occasional use of
television and phones. In the context of population groups, Madison belongs to the category of _____.
a. tweens
b. teens
c. baby boomers
d. Millennials
46. Identify a true statement about the Great Recession.
a. The economy completely recovered from the Great Recession in 2009.
b. The Great Recession spread around the globe by 2008.
c. The middle class was the least affected by the Great Recession.
d. The Great Recession increased employment rates to almost ten percent.
47. In the context of growing ethnic markets, African Americans in the U.S.:
a. spend more on store brands as compared to the general population.
b. comprise the largest percentage of population among different minority groups in the U.S.
c. are inclined to spend less on groceries and hair care products as compared to other cohorts.
d. acculturate into mainstream America forgetting their cultural heritage.
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48. Matthew has been receiving e-mails and text messages from Easy Bank, a new bank in his city, to open an account
with them. However, when he tried to verify the credentials, he found that the bank‘s Web site does not exist and the
phone number belongs to someone else. Matthew does not want to be harassed by these texts and e-mails. Matthew can
file a complaint under the _____.
a. Sarbanes Oxley Act
b. National Banking Act
c. Investor Protection Act
d. CAN-SPAM Act
49. Which of the following statements is true of a target market?
a. A target market is a closed group of people who do not drop out or allow new people into the group.
b. All the people in a target market share similar tastes, needs, incomes, and lifestyles.
c. Any change in a target market can be easily controlled by marketers.
d. A marketing mix is designed to appeal to a target market.
50. Hispanic Americans in the U.S.:
a. prefer to buy American products rather than brands found in their homelands.
b. are much older than the general U.S. population.
c. believe that the traditional family is the main building block of a healthy community.
d. are the most homogenous ethnic group.
51. Brett is a student who is taking a course on nutrition. He is currently working on a project to determine the most
popular food items preferred by children. His research is primarily based on what kinds of food children prefer and not on
why they prefer those foods. In this scenario, Brett’s research is a type of _____.
a. basic research
b. applied research
c. experimental research
d. problem-oriented research
52. Stephen recently purchased electronic equipment from Fournotts Corp., a firm that manufactures electronic
equipment, but the equipment malfunctioned during its first use. If Stephen lodges a complaint with the Federal Trade
Commission, which of the following bureaus will be responsible for taking action against the firm?
a. The Bureau of Consumer Protection
b. The Bureau of Economics
c. The Bureau of Competition
d. The Bureau of Consumer Privacy
53. Unlike the youngest Gen Yers, the oldest members of Generation Y:
a. are entering adulthood.
b. were least affected by the Great Recession.
c. turned 50 years old in 2016.
d. had difficulty finding good jobs during the Great Recession.
54. A difference between Gen Yers and baby boomers is that unlike Gen Yers, baby boomers:
a. are currently in two different stages of the life cycle.
b. are the most tech-savvy people yet.
c. outspend in categories such as gifts and medical care.
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d. prioritize saving money.
55. Jane is a 16-year-old sophomore. Since she stays abreast of the latest technology, she convinced her parents to replace
her old cell phone with a new one. Given this information, Jane is most likely a _____.
a. tween
b. teen
c. Gen Xer
d. Gen Yer
56. GoodBills, an insurance company, was ordered to shut down as it tried to illegally acquire its competitor ClearBooks.
Which of the following government agencies is responsible for the shutdown of GoodBills?
a. The Restoring American Financial Stability Act
b. The Consumer Financial Protection Bureau
c. The Federal Trade Commission
d. The Consumer Product Safety Commission
57. Fresnas Cuisine, a restaurant chain, recently introduced fast food in its menu. This action was taken because the top
management recognizes that their customers are predominantly young people. This scenario illustrates how _____
influence marketing decisions.
a. economic factors
b. demographic factors
c. legal factors
d. ethical factors
58. Which of the following statements is true of baby boomers?
a. The youngest baby boomers were around 34 years old in 2013.
b. They lay emphasis on price and quality while making purchase decisions.
c. They prefer to be addressed “senior,” “elderly,” or “aged.”
d. They are a small market with minimal spending power.
59. In the context of social factors that affect marketing, with component lifestyles, people are:
a. becoming nondiscriminating and undemanding.
b. choosing products that meet their diverse needs.
c. reducing the complexity of their buying behavior.
d. preferring products that meet traditional needs and interests.
60. Martha visits a departmental store and discovers that a box of exotic candles will cost her ten percent more than what
she had paid six months ago. The increase in prices is same across the country. In this scenario, which of the following
statements is true?
a. She will have immediate purchasing power if she had a pay raise to match the inflation.
b. She has to pay twelve percent more than what she paid last month.
c. The departmental store is trying to earn profits by increasing the prices of its goods.
d. The candles’ subjective value increases with the increase in inflation.
61. Which of the following statements is true of the younger Millennials?
a. They form a more massive group than older Millennials.
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b. They graduated from college during the Great Recession.
c. They do not spend time surfing the Web or on social media.
d. They had difficulty finding jobs when they graduated.
62. Which of the following statements is true about the population trends in the U.S.?
a. The populations of the rural regions of the U.S. are aging.
b. In many parts of the country, multigenerational households are increasingly rare.
c. Baby boomers are now the smallest population group.
d. Tweens are now the largest population group.
63. Which of the following basic values strongly influenced attitudes and lifestyles during the United States’ first 200
years?
a. Structural mobility
b. Self-sufficiency
c. Nonconformity
d. Self-dealing
64. John bought a new set of rechargeable batteries and plugged them into their charger to charge them before initial use.
The batteries were charged for three hours. Subsequently, he noticed that the battery acid had started oozing out. In this
scenario, John could lodge a complaint with the _____ against the battery manufacturer.
a. Consumer Product Safety Commission
b. Food and Drug Administration
c. Federal Trade Commission
d. World Health Organization
65. Which of the following statements is true of Generation Y?
a. Its members were born between 1965 and 1978.
b. Its members are tech savvy, but they still use traditional media.
c. Its members have the least spending power than any other cohort.
d. Its members are the first generation of latchkey children.
66. Which of the following statements is true about the trends prevalent among various ethnicities in the ethnic markets?
a. African Americans do not consider cultural/ethnic heritage is a critical part of their identity.
b. Hispanics of older generations are prone to be bilingual than Hispanic Millennials.
c. Asian Americans retain strong core values even if they embrace American values.
d. Asian Americans are less educated than any other minority group.
67. Jenny, a single child, moved with her parents to the U.S. when she was 8 years old. Her family is of Mexican descent.
Given this information, which of the following statements is true?
a. Acculturation into mainstream America is more evident in Jenny’s parents than in Jenny.
b. Purchase decisions in Jenny’s family will revolve around Jenny.
c. Jenny will acculturate to the locally dominant Spanish-speaking Hispanic community.
d. Jenny is most likely to be a monolingual Hispanic Millennial.
68. Samantha was born in the year 2000. She uses her smartphone all day, and she has an account in every popular social
media website. On the basis of this information, it can be concluded that Samantha belongs to the category of _____.
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a. tweens
b. teens
c. baby boomers
d. Millennials
69. Cameron was born in 1960. She is the retired CEO of a bank. She has amassed a vast amount of wealth during her
working years and spends a lot of it lavishly on her home and frequent vacations. She prefers making retail purchases and
refrains from making too many purchases online. In this scenario, Cameron most likely belongs to the category of:
a. teens.
b. tweens.
c. Millennials.
d. baby boomers.
70. Jessica was born in 1994. She spends more time on Facebook than reading magazines. Despite her inclination toward
social networking sites, she continues to listen to the radio and read magazines at times. Given this information, which of
the following statements is true of Jessica?
a. She does not expect brands to be on social media.
b. She is a younger Millennial.
c. She is one of the first generation of latchkey children.
d. She would have graduated from college during the Great Recession.
71. Which of the following statements is true of American teenagers?
a. They spend about six hours per week tuned in to electronic media
b. They make the largest cohort group.
c. They prefer face-to-face communication to communicating electronically.
d. They prefer Tumblr and Instagram to Facebook.
72. In the context of populations, which of the following statements is true of tweens in the U.S.?
a. They are the first generation of latchkey children.
b. They are an attractive market segment for mobile games.
c. They are a larger cohort than baby boomers.
d. They are aged between 14 and 18 years.
73. Which of the following statements is true of Gen Xers?
a. They spent more time without adult support and guidance than any other age cohort.
b. They have very low spending power.
c. They graduated from college during the Great Recession and had difficulty finding good jobs.
d. They are currently in two different stages of the life cycle.
74. Which of the following legislations created the Consumer Financial Protection Bureau (CFPB)?
a. The Restoring American Financial Stability Act
b. The Consumer Product Safety Commission
c. The Federal Financial Supervisory Authority
d. The Product Quality Commission
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75. Joshua, an HR manager in a multinational firm, is recruiting employees for his firm. During the self-introduction
stage, one of the interviewees, Martha, shares information about herself. In this case, which of the following information
shared by Martha is a demographic characteristic?
a. She lives in Manhattan.
b. She believes in social service.
c. She is very creative when it comes to cooking.
d. She prefers to use electronic gadgets of only one particular brand.
76. Which of the following is an element of a competitive environment?
a. Innovation and risk taking
b. The degree of interdependence within the industry
c. A consumer’s income
d. Consumers’ varied demographic characteristics
77. In the context of the external environment of a business, which of the following statements is true of social media?
a. The Internet of Things is increasingly being used by many people.
b. Social media seldom influence the buying behavior of consumers.
c. Usage rates are higher among older age groups.
d. Social media have limited consumers’ opinion sharing about companies.
78. Which of the following statements is true of today’s consumers in the U.S.?
a. They emphasize more on a product’s price than its quality.
b. They seldom give preference to brand names.
c. They are concerned about the nutrition in their food.
d. They tend to choose products that are expensive.
79. In the context of populations in the U.S., Millennials:
a. are now more in number than baby boomers.
b. spend the most on food than any other cohort.
c. have been least affected by the Great Recession.
d. are less interested in technology than any other group.
80. Which of the following can be considered as a demographic information of a person?
a. Intelligence quotient level
b. Beliefs
c. Skill sets
d. Age
81. Hydralicious, a juice outlet, had to stop its business as health inspectors found that the storage facilities at the outlet
did not meet the standards set by the government. In this scenario, a(n) _____ factor affected Hydralicious’s business.
a. technological
b. economic
c. legal
d. demographic
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82. BridgeWorks deals in high-end fashion apparels. The company believes that no design is bad and creativity should be
expressed. The company awards the best designs and designers every week. Which of the following approaches is used by
BridgeWorks?
a. Talking to early adopters
b. Using marketing research
c. Creating an innovative environment
d. Catering to entrepreneurs
83. Jason was born in 1970. He spent most of his childhood without much adult guidance as both his parents were
working professionals. In this case, which of the following is most likely to be true of Jason?
a. He is independent, resilient, adaptable, cautious, and skeptical.
b. He has a pessimistic outlook on the future.
c. He outspends other generations on consumer goods and services.
d. He possesses negligible amount of spending power.
84. Samuel was born in 1975. He had to look after himself when he was young as both his parents were busy with their
jobs. He believes that education and knowledge are very important, and he does not spend his money without careful
planning. In this scenario, Samuel belongs to the age group referred to as _____.
a. Generation X
b. Generation Y
c. teens
d. tweens
85. Wang is a 22-year-old translator who lives in California. His parents are from China. They had first moved to Europe
and then to America before Wang’s birth. He holds a postgraduate degree and is fluent in both English and Mandarin.
From the given information, it can be deduced that Wang is a(n) _____.
a. Hispanic
b. Black American
c. Asian American
d. European
86. Unlike Hispanic Americans, _____.
a. Asian Americans’ population growth has been fueled primarily by immigration
b. Asian Americans’ average family income is less than Hispanic Americans’ average family income
c. Asian Americans seldom retain their core Asian values
d. Asian Americans refrain from buying from Asian American stores
87. Which of the following statements is true about the Great Recession of 2008–2009?
a. Tweens were the most affected population group.
b. Inflation rates increased to almost ten percent.
c. It began with the collapse of inflated housing prices.
d. It increased employment opportunities in the U.S.
88. Which of the following statements is true of incomes in the U.S.?
a. The average family incomes rose slightly in 2013 and 2014.
b. The median household income is almost the same across different states.
c. A person’s demographics is the primary determinant of the person’s earning potential.
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d. The median household incomes have peaked in the recent years.
89. James earns $3,000 per month. If his overall cost of living is $1,700, his purchasing power is _____.
a. $3,000
b. $500
c. $1,300
d. $1,700
90. Which of the following statements is true of the incomes of baby boomers in the U.S.?
a. Baby boomers accumulated little amount of savings over their working years.
b. Baby boomers’ purchasing power is discretionary and guided by their parents.
c. Baby boomers’ current incomes are relatively low because many have retired.
d. Baby boomers’ want to age in a retirement community.
91. Paulina is an eleven-year-old girl. She spends a lot of time on social media and likes mobile games. In this case,
Paulina is most likely to be a:
a. baby boomer.
b. Millennial.
c. Gen Xer.
d. tween.
92. Discuss a few strategies for marketing products to baby boomers.
93. Discuss the relationship between businesses and governments.
94. Compare the effect of inflation and recession on the economic environment of the U.S.
95. List and explain the four basic values that have strongly American attitudes and lifestyles during the United States’
first 200 years.
96. List and discuss six approaches that are used by companies now to stimulate innovation.
97. Discuss competitive factors that affect a firm.
98. Discuss ways to market to the African American market in the U.S.
99. Explain the concept of a marketing mix.
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Answer Key
1. False
2. False
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