42. The four major competitive structures are:
a. monopolies, oligopolies, oligopolistic monopolies, and pure competition.
b. pure competition, heavy competition, moderate competition, and light competition.
c. brand, product, total budget, and generic.
d. oligopolies, monopolies, monopolistic competition, and pure competition.
e. monopolies, limited competition, oligopolistic competition, and pure competition.
43. Which of the following types of a competitive structure exists when a firm produces a product that has no close
substitutes?
a. Monopoly
b. Oligopoly
c. Monopolistic competition
d. Pure competition
e. Mixed competition
Chapter 3 – The Marketing Environment, Social Responsibility, and Ethics
44. The type of competitive structure that exists in the case where there are almost no substitutes for a product is:
a. monopolistic competition.
b. an oligopoly.
c. pure competition.
d. a monopoly.
e. noncompetition.
45. The American automobile industry was historically dominated by “The Big Three,” referring to General Motors,
Ford, and Chrysler. However, as many more foreign competitors began influencing this market, the American
companies had to modify and differentiate their products. The automobile industry moved from a(n) ____ structure
to a(n) ____ structure.
a. monopolistic; oligopolistic
b. oligopolistic; pure competition
c. oligopolistic; monopolistic competition
d. monopolistic competition; pure competition
e. monopolistic; monopolistic competition
Chapter 3 – The Marketing Environment, Social Responsibility, and Ethics
46. The Decca Electric Corporation produces light bulbs that are used in refrigerator manufacturing. Currently, only
three other companies produce bulbs used in the production of refrigerators, with Decca having the greatest market
share. In this case, Decca Electric Corporation would be considered:
a. an oligopoly.
b. a monopoly.
c. involved in monopolistic competition.
d. involved in perfect competition.
e. involved in a perfect oligopoly.
47. Which of the following firms would be most likely to have a monopoly for its competitive environment?
a. TimeWarner Cable TV
b. Mitchell Trucking
c. American Airlines
d. Rogers Plumbing
e. Chemlawn Lawn Care
Chapter 3 – The Marketing Environment, Social Responsibility, and Ethics
48. When a firm has many potential competitors and tries to develop a marketing strategy to differentiate its products
from the competitors’ products, _____ is said to exist in the competitive environment.
a. oligopoly
b. monopoly
c. pure competition
d. oligopolistic competition
e. monopolistic competition
49. Which of the following types of a competitive structure exists when just a few sellers control a large portion of the
supply of a product?
a. Monopoly
b. Oligopoly
c. Monopolistic competition
d. Mixed competition
e. Pure competition
Chapter 3 – The Marketing Environment, Social Responsibility, and Ethics
50. Changes Salon is part of the hair and personal care service industry. Which of the following types of competitive
structures represents this salon?
a. Pure competition
b. Monopoly
c. Monopolistic competition
d. Oligopolistic competition
e. Oligopoly
51. The tobacco industry in the United States is dominated by three large companies. When any one of these
companies changes its price on tobacco products, the other two companies quickly adjust their prices to match it.
From these characteristics, the tobacco industry could best be described as:
a. price sensitive.
b. opportunistic.
c. monopolistic competition.
d. an oligopoly.
e. a monopoly.
Chapter 3 – The Marketing Environment, Social Responsibility, and Ethics
52. J. Pitner Clothing is a medium-size specialty men’s and women’s clothing store in a market with many other
specialty stores, department stores, and discounters. It has established a reputation for offering high-quality,
fashionable merchandise with quality service. J. Pitner’s competitive environment would best be characterized as:
a. a monopoly.
b. an oligopoly.
c. monopolistic competition.
d. pure competition.
e. faceted competition.
53. Which of the following competitive structures is rarely followed by organizations?
a. Monopoly
b. Monopolistic competition
c. Oligopoly
d. Elastic competition
e. Pure competition
Chapter 3 – The Marketing Environment, Social Responsibility, and Ethics
54. The best approach for a company to take when monitoring its competitors is:
a. watching for increases and decreases in competitors’ prices and match them.
b. analyzing all information that is readily available about competitors.
c. sending employees to competitors’ offices and factories to observe their actions.
d. developing a system for gathering ongoing information about competitors.
e. reading important business publications such as The Wall Street Journal.
55. Assuming that inflation is low, high buying power characterizes the ____ stage of the business cycle.
a. prosperity
b. depression
c. recovery
d. succession
e. recession
Chapter 3 – The Marketing Environment, Social Responsibility, and Ethics
56. _____ is the stage of the business cycle where the unemployment rate is low and total income is relatively high.
a. Repression
b. Prosperity
c. Recovery
d. Recession
e. Depression
57. Total buying power declines during periods of economic:
a. recovery.
b. prosperity.
c. recession.
d. uncertainty.
e. expansion.
Chapter 3 – The Marketing Environment, Social Responsibility, and Ethics
58. Publix Supermarket is revising its marketing plan for the upcoming quarter. It typically focuses on its wide variety
ofproductsanditshighqualitycustomerservice,havingveryfewweekly“sales.”However, during the upcoming
quarter,Publixplanstofocusonpriceandvalue,andpromoteweekly“values”instead.Hence, this supermarket is
most likely in:
a. inflation.
b. prosperity.
c. recession.
d. depression.
e. recovery.
59. Consumer confidence is low during periods of:
a. recession.
b. prosperity.
c. recovery.
d. slowdown.
e. depression.
Chapter 3 – The Marketing Environment, Social Responsibility, and Ethics
60. Consumer confidence and willingness to spend begin to increase during periods of ____.
a. depression
b. prosperity
c. recovery
d. growth
e. recession
61. The strength of a person’s “buying power” depends on economic conditions and:
a. his or her level of income.
b. the size of resources that are used for purchases.
c. how much the person will buy.
d. his or her spending pattern.
e. his or her levels of median wealth.
Chapter 3 – The Marketing Environment, Social Responsibility, and Ethics
62. Why are marketers interested in consumers’ levels of disposable income?
a. It accurately predicts future buying power.
b. It increases current buying power.
c. It is the amount remaining after paying taxes and making savings which is used to buy luxuries.
d. It is a ready source of buying power.
e. It is essential for forecasting future business trends.
63. The amount of money received through wages, rents, investments, pensions, and subsidies is called:
a. income.
b. wealth.
c. discretionary income.
d. prosperity.
e. credit.
Chapter 3 – The Marketing Environment, Social Responsibility, and Ethics
64. Marketers are most interested in _____ of consumers.
a. wealth
b. disposable income
c. discretionary income
d. total income
e. extra income
65. What is the most important factor in distinguishing disposable income from income?
a. Taxes
b. Housing
c. Employment levels
d. Consumer spending
e. Saving
Chapter 3 – The Marketing Environment, Social Responsibility, and Ethics
66. Which of the following are the major financial sources of buying power?
a. Disposable incomes
b. Past income, natural resources, and financial resources
c. Wages, rents, and investments
d. Income, wealth, and credit
e. Discretionary incomes
67. Discretionary income is associated with all of the following except:
a. automobiles.
b. education.
c. pets.
d. furniture.
e. food.
Chapter 3 – The Marketing Environment, Social Responsibility, and Ethics
68. Lindsay was reviewing her bank statement for last month. She had paid her rent, her car payment, electric and
phone bills, and made three trips to the grocery. Lindsay had also bought tickets to a Katy Perry concert and new
clothestoweartotheconcert.ThemoneyspentonLindsay’srent,car,electricandphonebillswaslikelyfromher
____ , while the money spent on the concert tickets and new clothes was from her _____.
a. disposable income; savings
b. gross income; disposable income
c. disposable income; net income
d. disposable income; discretionary income
e. gross income; savings income
69. The accumulation of past income, natural resources, and financial resources is known as:
a. income.
b. collected income.
c. credit.
d. wealth.
e. savings.
Chapter 3 – The Marketing Environment, Social Responsibility, and Ethics
70. Which of the following companies would probably be most interested in tracking discretionary income levels?
a. Safeway food stores
b. BMW automobiles
c. Gulf States Utilities
d. General Mills
e. Florida Orange Growers
71. By offering both credit and financing through its GMAC division, General Motors Inc. is trying to help consumers:
a. expand future buying power at the expense of current buying power.
b. expand disposable income at the expense of discretionary income.
c. expand current buying power at the expense of future buying power.
d. expand both disposable income and wealth.
e. decrease both disposable and discretionary income.
Chapter 3 – The Marketing Environment, Social Responsibility, and Ethics
72. When using credit to make purchases, consumers are:
a. decreasing current buying power and increasing future buying power.
b. increasing their present discretionary income to extend purchasing power.
c. putting themselves at significant risk of financial disaster.
d. forgoing the accumulation of wealth to increase current income.
e. increasing current buying power at the expense of future buying power.
73. Texas rice farmers wish to get their product into the Japanese market, but are hindered by a complex maze of
regulations imposed by the Japanese government. The farmers are most likely to attempt to influence the
_____aspect of the marketing environment.
a. sociocultural
b. technological
c. competitive
d. economic
e. political
Chapter 3 – The Marketing Environment, Social Responsibility, and Ethics
74. Textile companies historically face issues concerning the use of child labor in foreign countries and the various
regulations created concerning this labor. Thus, executives in these companies are most likely to influence the
_____ forces of the marketing environment.
a. economic
b. competitive
c. political
d. environmental
e. sociocultural
75. Which of the following acts was enacted to prevent businesses from restraining trade and monopolizing markets?
a. Sherman Antitrust Act
b. Clayton Act
c. Federal Trade Commission Act
d. Robinson-Patman Act
e. Wheeler-Lea Act
Chapter 3 – The Marketing Environment, Social Responsibility, and Ethics
76. If all the gas stations in a city collaborated to determine what gas prices should be charged, they would be violating
the:
a. Wheeler-Lea Act.
b. Clayton Act.
c. Robinson-Patman Act.
d. Sherman Antitrust Act.
e. Celler-Kefauver Act.
77. Which of the following provides protection for and regulates brand names, brand marks, trade names, and
trademarks?
a. Lanham Act
b. Clayton Act
c. Robinson-Patman Act
d. Sherman Antitrust Act
e. Celler-Kefauver Act
Chapter 3 – The Marketing Environment, Social Responsibility, and Ethics
78. International Office Supplies wholesaler charges different prices to its various customers without any legal
justification. This company is in violation of the:
a. Sherman Antitrust Act.
b. Wheeler-Lea Act.
c. Lanham Act.
d. Federal Trade Commission Act.
e. Robinson-Patman Act.
79. Price discrimination is prohibited by the ____ Act.
a. Sherman
b. Wheeler-Lee
c. Robinson-Patman
d. Celler-Kefauver
e. Consumer Goods Pricing
Chapter 3 – The Marketing Environment, Social Responsibility, and Ethics
80. The 1990 Nutritional Labeling and Education Act directly prohibits:
a. exaggerated claims made by all products.
b. putting the words “cholesterol-free” on any food package.
c. putting nutritional information on most food products.
d. exaggerated health claims on food packages.
e. the use of any health claim on food packaging.
81. Consumer protection legislation deals with all of the following legal concerns except:
a. consumer safety.
b. sale of hazardous products.
c. monopolistic practices.
d. information disclosure.
e. health claims on food packages.
Chapter 3 – The Marketing Environment, Social Responsibility, and Ethics