1. Which of the following statements about ethical behavior in business is TRUE?

The legal environment sets the highest standard of ethical behavior.

The legal environment sets the maximum standard of ethical behavior.

The legal environment sets the minimal standard of ethical behavior.

The legal environment sets the normative standard of ethical behavior.

2. Which of the following statements is a challenge facing marketers?

If it ain't broke, don't fix it.

Change is the only thing that is constant.

We need to reject international competition.

We need to use technology as much as possible.

3. Given the following data, compute the break-even point (BEP) in DOLLARS. Selling price = $2.00, Variable cost = $1.00, Fixed cost =

$150,000

$300,000

$400,000

$150,000

$200,000

4. Elijah has classified the following items under variable costs. Which item has he classified INCORRECTLY?

expenses for parts

wages

outgoing freight

property taxes

5.Michael Soles--owner of Soles Shoe Store--recently discovered that shoe stores in his trading area have an average markup of 40%. Upon investigation, Michael found that his average markup is $15 on shoes that he sells for $45. This suggests that:

Michael has higher-than-average costs.

Michael is pricing his products higher than his competitors are.

Michael is taking a smaller average markup than his competitors are.

Michael's markups in dollar amounts are about the same as his competitors.

6. Gabriella Sax believes that customers in her dress shop find certain prices very appealing. Between these price levels, all prices are seen as roughly the same, and price cuts in these ranges generally do not increase the quantity sold (i.e., the demand curve tends to drop vertically within these price ranges). Therefore, Sax prices her items as close as possible to the top of each such price range. This is referred to as:

bait pricing.

leader pricing.

prestige pricing.

psychological pricing.

7. Mark is trying to determine his firm's average cost per unit of production. He finds that the cost for all labor and materials is $80,000 and fixed overhead expenses are $40,000. If the company produces 20,000 items in the time period, the average cost is __________.

$12

$6

$2

$4