TX-Principles of Business/ Marketing and Finance A Flashcards
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What is a commodity? A. Something that producers are unable to sell to consumers B. A resource that is available in unlimited quantities C. An exchange between a producer and a consumer D. Something of value that can be bought, sold, or traded
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d
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What is likely to happen if the price of a product goes up? A. The supply is likely to increase. B. The supply is likely to decrease. C. The demand is likely to cause scarcity. D. The demand is likely to increase.
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a
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Which of the following is an indirect competitor for a company that makes chocolate chip cookies? A. Another company that makes chocolate chip cookies B. A company that makes potato chips C. A company that makes baking pans D. A company that makes brownies
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d
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What does scarcity force people to do? A. Produce commodities B. Make choices C. Consume products D. Increase inflation
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b
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In a planned economy, prices of commodities are controlled by _________. A. Supply and demand B. Producers and consumers C. The government D. Private enterprises
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c
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A producer is someone who _____________. A. Makes a commodity available for sale or exchange B. Buys or trades in order to receive a commodity C. Is in the market for a commodity D. Receives a commodity from a business
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a
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If your company uses a nonprice competition strategy, what should you focus on? A. Lowering prices B. Differentiation C. Creating direct competitors D. The public sector
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b
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If the demand for a product decreases, what is likely to happen? A. The supply is likely to increase. B. The demand is likely to be inelastic. C. The price is likely to increase. D. The price is likely to decrease.
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d
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A market economy is regulated by the interactions between which two things? A. Goods and services B. Producers and consumers C. Product-based and service-based businesses D. Public and private sectors
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b
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Which of the following is a sign of a strong economy? A. An increase in GDP B. A shrinking economy C. An increase in unemployment D. A decrease in spending power
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a
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The law of diminishing returns is often used to analyze the ideal amount of which factor of production? A. Capital B. Land C. Entrepreneurship D. Labor
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d
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How is the value of a product determined? A. By the amount a consumer is willing to pay for it B. By how much it cost the producer to make C. By its variable costs D. By the number of workers who were involved in making it
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a
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A computer game that can be purchased online and played right away has good ________ utility. A. Form B. Information C. Value D. Time
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d
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Which of the following is a fixed cost for a company that sells greeting cards online and mails the printed cards to customers? A. The paper and glue to make the cards B. Hourly workers who assemble and ship the cards C. Packaging and shipping costs D. A paper cutting machine
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d
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If your company has a large production-related task, such as assembling an airplane, what strategy could help you increase productivity? A. Generalization B. Decreasing your use of technology C. Raising prices D. Division of labor
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d
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A company's ________ tells you how much money the company has left over after subtracting all expenses. A. Net profit B. Gross profit C. Revenue D. Cost of goods sold
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a
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Which of the following is a way to increase possession utility for a refrigerator? A. Creating brochures about the product B. Providing a delivery service C. Expanding the store hours D. Making a Web site with information about the product
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If productivity increases significantly and demand is not very elastic, what is likely to happen? A. The number of consumers will increase. B. Fewer workers will be needed. C. Division of labor will decrease. D. Demand will increase
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Economies of scale give an advantage to what type of company? A. A company with a small number of employees B. A company that makes many sales C. A company with many variable costs D. A service-based company
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Your company buys a car, and its value goes down over time. What is that process called? A. Leasing B. Depreciation C. A unit of sale D. Interest
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A company that is organized by both product and function is using ________ organization. A. Flat B. Hierarchical C. Market D. Matrix
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d
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Which of the following describes a saturated market? A. The prices of competitors are very high. B. Many people want this product and haven't purchased it yet. C. Most potential buyers have not heard of the product and don't know it exists. D. Most potential buyers already have a product that satisfies this need or want.
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What does a company's customer service department do? A. Promote the company to new groups of potential customers. B. Interact with customers after they have purchased the product. C. Receive payments from customers and handle the company's money. D. Handle employee-related procedures.
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b
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Which of the following types of business ownership has the advantages of pass-through taxation and liability protection? A. A sole proprietorship B. An LLC C. A C corporation D. A partnership
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A company that builds houses and a company that makes cars are part of the __________ industry. A. Retailing B. Extractive C. Wholesaling D. Manufacturing
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Which of the following business ownership structures is the simplest and easiest to set up? A. A partnership B. An LLC C. A sole proprietorship D. A C corporation
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c
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A company is usually unable to take advantage of economies of scale during the __________ stage of the product life cycle. A. Saturation B. Introduction C. Growth D. Maturity
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b
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A corn farm, a coal mine, and a fishing company are all part of the _________ industry. A. Manufacturing B. Service C. Extractive D. Retailing
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c
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Your company manufactures children's toys, and you want to keep the prices as low as possible for individual consumers. Which of the following things could you do to keep prices low? A. Add subcontractors to the manufacturing process. B. Hire tradespeople. C. Keep the distribution chain short. D. Add companies to the distribution chain.
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c
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Which of the following business ownership structures offers the best liability protection but higher taxes? A. A nonprofit corporation B. A C corporation C. A partnership D. A sole proprietorship
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b
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What does an exchange rate tell you? A. How many products have been exchanged between two different countries B. The number of people in one country in comparison to another country C. How much one unit of currency is worth when converted to another currency D. The speed that people are buying a specific type of product
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c
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A good investment should do one or both of which two things? A. Grow in value or produce income B. Raise prices or increase demand C. Avoid opportunity cost or increase volatility D. Decrease diversification or decrease interest
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What is the best way to deal with volatility and get the best return on your investment? A. Invest only in very safe investments. B. Put your money in a savings account. C. Avoid investments that create capital gains. D. Use diversification.
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A __________ is when you take money out of the bank. A. Deposit B. Transfer C. Branch D. Withdrawal
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As a unit of measure, money makes it easier for consumers to do what? A. Compare prices of different products. B. Make a bigger profit from their income. C. Have a better exchange rate with other currencies. D. Get more unearned income.
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Which of the following is an example of earned income? A. A paycheck you receive for work you have done B. Interest on money you lent to a friend C. A gift of money from a friend or family member D. Money you receive from a company you invested in
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a
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If you want to compare two different investments, what should you calculate? A. The compound interest B. The ROI percentages C. The ROI dollar amounts D. The capital gain
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What is a minimum balance? A. The process of balancing your checkbook register against your bank statement B. The largest number of checks you can write in a month C. The smallest withdrawal you can make from a bank account D. The smallest amount of money you can keep in a bank account
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d
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If you plan to take money out of the bank frequently, what type of account should you get? A. A savings account B. A checking account C. An interest account D. An investment account
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Why can a bank afford to pay an interest rate on a savings account? A. Because the bank is insured by the FDIC B. Because the Fed prints more currency when needed C. Because the bank puts the money into equity investments D. Because the bank lends that money out at a higher interest rate
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Which type of tax provides income for retired and disabled people and their families? A. Social Security tax B. Medicare tax C. Property tax D. Income tax
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A company sells a car to a consumer and helps the consumer set up a loan with regular set payments. What type of credit is this? A. Revolving credit B. A line of credit C. Noninstallment credit D. Installment credit
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Which of the following is a strategy for using credit wisely while improving your credit score? A. Pay off your credit card in full each month. B. Use as much of your total available credit as you can. C. Pay exactly the minimum payment on your credit cards each month. D. Avoid using your credit card.
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How is a line of credit similar to a credit card? A. Interest is charged only on the amount you actually borrow. B. The interest rates are the same. C. They both require co-signers. D. Lenders don't check your credit score.
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If you use credit, what are you creating? A. A line of credit B. Debt C. Collateral D. A default
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______________ is the amount an employee earns before payroll withholding is performed. A. Net pay B. Gross pay C. Taxable interest D. An estate
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Which of the following things can help you get a lower interest rate when you receive a loan? A. A low credit score B. A history of defaulting C. Using all of your available credit D. Collatera
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When you receive a loan, the money the lender gives you is called the ____________. A. Interest B. Line of credit C. Principal D. Collateral
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If you co-sign for a friend's credit card, what is the danger to you if your friend fails to pay? A. You might get secured credit. B. You might have to pay extra money in taxes. C. Your credit score might go down. D. Your credit score might go up.
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When you pay more than you owe in taxes and the IRS gives you money back, that money is called _________. A. A tax refund B. Gross pay C. Estimated tax D. An audit
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If you wanted to make sure a company has enough money available to pay its bills, which financial statement would be most helpful? A. Balance sheet B. Income statement C. Statement of owners' equity D. Cash flow statement
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Which of the following is a type of liability? A. A revenue stream B. A liquid asset C. Accounts payable D. Accounts receivable
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If you want to know whether a company had a profit or a loss during a specific period of time, which financial statement would be most helpful? A. Statement of owners' equity B. Cash flow statement C. Balance sheet D. Income statement
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The amount that people are willing to pay for each additional unit of a product or service is the _____________? A. Opportunity cost B. Marginal benefit C. Marginal cost D. Investment opportunity
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What is the opportunity cost of an investment? A. The combined values of the other opportunities available B. The value of the next most valuable opportunity C. The marginal benefit of the investment D. The volatility of the investment
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Money that your company has in the bank in case of unexpected financial needs or in case sales slow down is called ____________. A. An asset fund B. A cash reserve C. Equity D. Insurance
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In the accounting equation, assets are equal to which two things? A. Debits + equity B. Debits + accounts C. Liabilities + equity D. Liabilities + accounts
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c
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Which of the following statements describes GAAP? A. GAAP standards are written and regulated by the government. B. It is legally required that all companies meet GAAP standards. C. Companies that meet GAAP standards usually use cash basis accounting. D. GAAP recommends accrual basis accounting.
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Which of the following assets is the most liquid? A. Inventory B. Real estate C. Money in the bank D. A piece of equipment
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The costs of running a business are called ___________. A. Startup costs B. Cash flow C. Operating expenses D. Fixed costs
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c
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The U.S. encourages domestic companies to export because _____________. A. It increases inflation. B. It increases the number of U.S. consumers who buy domestic products. C. It increases the value of a U.S. dollar. D. It improves the interest rate.
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Which of the following is a reason a country might put a tariff on imports? A. To form an agency relationship B. To increase its exports C. To protect domestic companies D. To create free trade
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c
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In a contract, what is consideration? A. Exchanging things of value B. Breaching the contract C. A business tort D. The minimum age for the contract
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Which type of tort happens when you unfairly damage another company's reputation? A. Fraud B. Conflict C. Interference D. Defamation
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Which of the following agencies protects human health and the natural environment? A. The FTC B. The EEOC C. The CPSC D. The EPA
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Which type of intellectual property can protect your company's logo? A. A DBA name B. Patent C. Copyright D. Trademark
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A ________ is a civil wrong caused by negligence or intentional harm. A. Conflict of interest B. Breach C. Union D. Tort
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Which of the following is true of unethical behavior? A. It may cause people to lose trust in you. B. It may be prevented by creating conflicts of interest. C. It is always illegal. D. It is regulated by administrative law.
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Which of the following is likely to increase the value of a country's currency? A. The country's imports are higher than its exports. B. The country has high inflation. C. The country has a lot of debt. D. The country has a high interest rate.
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Which government agency enforces federal laws against employers who discriminate based on age or religion? A. The SEC B. The ADA C. The FLSA D. The EEOC
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A _____________ is created by a consumer problem, need, or desire. A. Financial prediction B. Company scope C. Competitive analysis D. Business opportunity
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In a company's SWOT analysis, which of the following is an example of a threat? A. The company makes a low quality product. B. The company's employees have bad morale. C. There are many competitors in the market. D. The market is not very saturated.
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In a company's SWOT analysis, which of the following is an example of a strength? A. A law is passed that decreases demand for the company's product. B. A demographic trend increases demand for the company's product. C. The company's employees are efficient and productive. D. The company doesn't have many competitors.
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Which of the following sections of a business plan comes first but should be written last? A. Goals and Strategy B. Executive Summary C. Products and Services D. Funding Request
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How does limiting a company's scope benefit the company? A. It encourages the company to use division of labor. B. It makes it easier to produce a high quality product. C. It lowers the company's taxes. D. It allows the company to hire more employees.
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Health food and exercise are examples of what type of trend? A. Demographic trends B. Style trends C. Technology trends D. Lifestyle trends
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The spoken version of your company's purpose is called _____________. A. An elevator pitch B. A vision statement C. Your values D. Differentiation
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What type of trend is caused by changes in the characteristics of a population? A. A style trend B. A competitive trend C. A lifestyle trend D. A demographic trend
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The U.S. consumer market is large, but other markets may offer what advantage? A. Higher levels of market saturation B. Better opportunities for growth C. More demographic trends D. More entertainment trends
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Which of the following is one of the main things to consider when evaluating a business opportunity? A. Customer demand for the product B. Style and entertainment trends C. The number of employees you plan to have D. The mission statements of competitors
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a
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If you collect personal information about your customers, what should you do? A. Tell customers how you will use and protect their information. C. Give the customers access to your database so they can learn about other customers. B. Share their information with other companies in your industry. D. Hide customer information from most of your employees.
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In the five C's, how is cost different from price? A. It includes the company's operating costs. B. It makes it easier to promote the product. C. It reduces the company's operating expenses. D. It includes all of the costs related to the product.
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Instead of focusing on a good, a company that provides a service is likely to focus its marketing message on what? A. The physical goods that are used to provide the service B. The features of the service or the data storage methods the company uses C. The people who provide the service or the experience customers will have D. The company's competitors or the SWOT analysis of the company
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c
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_____________ is when your company makes an effort to actively control and shape your brand image with your target market. A. Market penetration B. Market segmenting C. Data mining D. Market positioning
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If your company increases its market penetration, what is happening? A. The target market is growing. B. More people in the target market are buying the company's product. C. The market saturation of the target market has decreased. D. Competitors who offer similar products are entering the market.
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A company's ____________ is the percentage of the total target market for the product that belongs to the company. A. Market saturation B. Market share C. Brand image D. Market information
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Which of the following is an example of secondary data? A. Your company observes the behavior of people who visit your Web site. B. Your company conducts a customer profile survey. C. Your company collects and analyzes data from the U.S. census. D. Your company collects credit card information from customers.
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c
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What is data mining? A. A promotion strategy B. Entering primary data into a CRM database software program C. Collecting primary and secondary data D. Analyzing data to detect patterns of shared characteristics
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d
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Which of the following is an example of promotion? A. The quality of a product B. The price of a product C. An advertisement D. An employee who works for your company
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c
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Which type of data does your company collect from customers or potential customers? A. Positioning data B. Market share data C. Primary data D. Secondary data
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c
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What is institutional advertising focused on promoting? A. A company B. The Internet C. A service D. A good
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a
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Which of the following marketing messages are consumers most likely to trust? A. A TV commercial B. An article about the company in a city newspaper C. An Internet advertisement D. A phone conversation with an employee of the company
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A company's PR efforts are often aimed at doing what? A. Getting publicity. B. Reducing press releases. C. Getting more ads. D. Comparing ad prices.
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a
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Which of the following types of advertising is most likely to help establish your company's credibility? A. TV advertising B. Internet advertising C. Radio advertising D. Word of mouth promotion
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a
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Which of the following types of promotion is usually the least expensive for a company? A. Personal selling B. Publicity C. Direct marketing D. Advertising
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Which of the following types of advertising is the most difficult for consumers to ignore? A. Sales promotions B. Press releases C. Product placement D. TV commercials
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c
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Which of the following is an example of a sales promotion? A. Pay per click Internet advertising B. A coupon that expires in one month C. A company newsletter D. A permanent price reduction
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b
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Word of mouth promotion is also known as what? A. Personal selling B. Viral marketing C. Direct marketing D. Institutional advertising
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b
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Which of the following can help you evaluate the performance of your ads and other marketing strategies? A. Asking competitors what they think of your advertising strategy B. Collecting secondary data about your target market C. Asking customers how they found out about your company or product D. Sending out a press release multiple times
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c
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Which of the following types of ads is most likely to feel personal? A. A newspaper advertisement that includes the company logo B. A brightly colored magazine ad C. A billboard with a photo of a celebrity D. A radio ad that is read by a trusted radio host
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d
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A print ad usually includes which two things? A. Images and text B. Images and video C. Video and sound D. Text and sound
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a
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Which of the following is an example of an advertisement? A. A company newsletter B. A billboard C. A press release D. A news article about the company
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b
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Which of the following types of advertising has the advantage of being especially affordable? A. Magazine advertising B. Infomercials C. Internet advertising D. Billboard advertising
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c
