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Exam 1 Study Questions with Key

by: Janine Morgan

Exam 1 Study Questions with Key ADV 3320

Marketplace > Texas Tech University > Advertising > ADV 3320 > Exam 1 Study Questions with Key
Janine Morgan
GPA 3.0

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These Q&A (with key) cover the following - Market Theory: Functions, Dysfunctions, Assumptions and Failures - Two Schools of Thought (Info/Power) and how they differ - Advertising's Effect on De...
Advertising and Society
Dr. Gotlieb
Study Guide
Marketing, Advertising
50 ?




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This 10 page Study Guide was uploaded by Janine Morgan on Saturday September 17, 2016. The Study Guide belongs to ADV 3320 at Texas Tech University taught by Dr. Gotlieb in Fall 2016. Since its upload, it has received 35 views. For similar materials see Advertising and Society in Advertising at Texas Tech University.


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Date Created: 09/17/16
1. What is a function? a. something that is bad for for society. b. something that has good implications for society c. something that society deems as good d. something that has bad implications for society 2. What is a dysfunction? a. something that is bad for for society. b. something that has good implications for society c. something that society deems as good d. something that has bad implications for society 3. Answer the following: functions and dysfunctions are… a. occurring at the same time b. debatable depending on your political party c. debatable depending on your perspective d. good for society 4. What is implicit when dealing with functions and dysfunctions? a. concern for others b. who is affected c. concern for the common good d. the problem of subjectivity 5. What is the problem of subjectivity? a. how to define common good b. if we can agree on what is a function or dysfunction c. if we can agree on our goals d. all of the above 6. Can functions and dysfunctions occur simultaneously? a. yes b. no 7. What is common good? a. the good of the people b. what is best for the people c. a product we can all use d. something we all benefit from 8. What is the philosophy underlying capitalism? a. modern libertarianism theory b. what the market defines c. classic liberalism theory d. market theory failures 9. What does laissez-faire mean? a. hands on b. interfering with others c. hands-off d. what the government does 10. Who acts as voters or has sovereignty? a. sellers b. customers c. producers d. advertisers 11. The self righting explains that good things will be … a. punished b. welcomed c. rewarded d. killed 12. Producing the common good does what for society? a. keeps quality high b. only betters the lives of the poor c. punishes products d. rewards good products 13. What is not a limitation of using the market to determine the common good? a. defense of the status quo b. assuming the market functions properly c. accepting questions of how things could be better d. assuming consumers are rational 14. What is perfect information? a. when the consumer has all the information necessary b. when both parties have all the information c. when no one has information d. no idea 15. What is perfect competition? a. when one side can’t dictate the terms of the exchange b. parties don’t have equal bargaining power c. absence of deceitful information d. absence of externalities 16. What’s an externality? a. side kick b. something that should be internalized c. side effect d. what happens to others 17. What is not a market theory assumption? a. absence of externalities b. perfect competition c. indivisibility d. economic rationality 18. What does it mean to be divisible? a. can be divided into exchangeable units b. something that can’t be divided c. something that won’t be divided d. yeah 19. What is a free rider? a. someone who gets the benefits but not a member of the exchange b. someone who gets a free uber c. someone who is excluded from the benefits of the exchanges d. the seller 20. What can discourage new competition? a. high advertising costs b. barriers to entry c. companies trying to push you out d. all of the above 21. Is a market failure a function or dysfunction of the market theory? a. function b. dysfunction 22. What happens to consumer sovereignty when a market failure occurs? a. it doesn’t work b. it’s not affected c. the consumers stop shopping d. system fails 23. What is not a type of market failure? a. excessive competition b. public good c. private goods d. merit goods 24. When a seller has power, what happens to the price? a. price goes up b. price goes down c. price fluctuates d. price stays the same 25. When a buyer has the power, what happens to the price? a. price goes up b. price goes down c. price fluctuates d. price stays the same 26. Which market failure are the examples in 24 and 25 talking about? a. imperfect competition b. externalities c. public goods d. merit goods 27. As a society we allow _______. a. monopolies b. oligopolies c. natural monopolies d. monopsonies 28. When a firm is price fixing they are engaged in this market failure a. monopolistic competition b. imperfect competition c. collusion d. anti-competitive conduct 29. What is bounded rationality? a. when you can’t know certain things because you’re incapable b. when the seller has issues with the information c. lack of understanding by a capable individual d. when you don’t care 30. What is cognitive dissonance? a. when you don’t care b. when you ignore the information c. when you can’t understand d. when you can’t hear the information 31. An example of asymmetric information is when a landlord … a. doesn’t know there’s a roach problem b. doesn’t tell you there’s a leak c. forgets to call the maintenance guy to fix it d. tells you about the hole in the wall 32. A negative externality is when a party not involved with the exchange… a. benefits from the exchange b. doesn’t care about the exchange c. doesn’t know about the exchange d. is harmed by the exchange 33. A public good is… a. a light post b. a park c. most infrastructure d. all of the above 34. Society deems demerit goods as a. harmful b. positive c. negative d. beneficial 35. What is the role of government during market failures? a. they can step in to help alleviate the problem b. they don’t step in c. they usually step in or try to prevent market failures d. they let it work itself out 36. What is not a way advertising contributes to the market theory? a. it causes fluctuation in the price levels b. it contributes to market failures c. it can give misinformation d. it is a function 37. What is not in agreement with the market information school? a. advertising is persuasive b. advertising is functional c. ads give us information we wouldn’t know otherwise d. advertising makes it possible for new products to get noticed 38. What is not a believe of the market power school? a. advertising is dysfunctional b. advertising is expense focused c. advertising highlights a product’s meaningless attributes d. advertising leads to higher prices 39. What would the market power school most agree with? a. Advertising leads to a higher price because of more competition b. Advertising creates a stronger brand loyalty so consumers are more price sensitive c. Advertising creates a stronger brand loyalty so consumers are less price sensitive d. Advertising leads to a lower price because of less competition 40. Which school of thought fits: “ Advertising leads to higher quality because of more competition”? a. market information school b. market theory school c. market power school d. market product school 41. What is not a major flaw with market information school? a. assumes advertising always does research on other competitors b. bounded rationality c. assuming the consumers can judge merits of other brands d. knowing who your market is 42. What is not a major flaw with market power school? a. assuming advertising is the sole cause of brand loyalty b. assuming advertising is the sole cause of price insensitivity c. assuming there’s no other causes d. assuming consumers know their competitors 43. Demand elasticity refers to a. the slope of the equation b. the steepness of the line c. how flat the line is d. how the changes affect each other 44. When looking at the demand curve we look at how changes in ____ affect ______. a. price, quantity b. quantity, price c. supply, price d. quantity, supply 45. Elastic demand refers to a. how flat the line is b. gas, medication, water c. how consumers are insensitive to price d. having few alternatives in the product market 46. Inelastic demand refers to a. how vertical the line is b. how consumers are sensitive to price c. how there’s lots of competition in the product market d. vacations, luxuries, junk food 47. List the three levels of consumer demand in order from least to most specific a. primary demand, selective demand, aggregate consumption b. selective demand, primary demand, aggregate consumption c. aggregate consumption, primary demand, selective demand d. aggregate consumption, selective demand, primary demand 48. Define aggregate consumption a. total demand for kellogg’s cereal b. total demand for all brands in a given product category c. demand for specific brand of a product d. total demand for all goods and services 49. Define primary demand a. total demand for kellogg’s cereal b. total demand for all brands in a given product category c. demand for specific brand of a product d. total demand for all goods and services 50. What is advertising’s effect on consumer demand? a. hard to tell in aggregate consumption b. easiest to tell in selective demand c. overall assumed to be that it increases quantity demanded d. all of the above 51. When I see an advertisement for Coke, but go out and buy a Dr. Pepper as a result, you might say that’s increase demand in the ______ area a. Product demand b. soda demand c. selective demand d. primary demand 52. Which is the easiest to find evidence for when looking for advertising’s affect on demand? a. primary demand b. selective demand c. product demand d. aggregate consumption 53. Which is the hardest to find evidence for when looking for advertising’s affect on demand? a. primary demand b. selective demand c. product demand d. aggregate consumption 54. What are the cycles of product life? a. introduction, maturation, growth, decline b. intro, growth, maturity, decline c. the same as a baby’s d. growth, introduction, maturity, decline 55. What is the most important stage for advertising? a. introduction b. growth c. maturity d. decline 56. When does the product’s life peak? a. introduction b. growth c. maturity d. decline 57. What is not true of the introduction stage? a. it’s a totally new product b. it’s a revised version of a product c. the product is not well known d. sales can be slow 58. What is not true of the growth stage? a. rapid market expansion b. sales climb c. copy cat products appear d. profits still aren’t realized 59. What is not true of the maturity stage? a. sales will decline b. profit margins decline c. the market is saturated; everyone owns this product d. new updated versions of the product are created 60. What is not true of the decline stage? a. the product becomes obsolete b. not all products get to this stage c. the product will not be phased out d. an example is VHS 61. Advertising is more _____ based in the introduction stage and more _______ based in the maturity stage. a. content, loyalty b. brand, information c. persuasion, loyalty d. loyalty, information 62. In selective demand, advertising focuses more on a. brand loyalty b. increasing market share of a brand c. increasing sales d. increasing awareness 63. Good advertising has a _____ effect. a. positive b. informative c. substantial d. effective 64. When is selective demand marketing more effective? a. intro stage b. growth c. maturity d. decline 65. Why might advertising lower prices? a. easy entry for newer products b. providing communication and efficiencies c. lowers consumer search costs d. all of the above 66. What is an economy of scale? a. large scale distribution leading to higher prices b. small scale distribution leading to higher prices c. large scale production leading to lower prices d. small scale production leading to lower prices 67. Price competition can lead to what? a. lower prices b. price wars c. advertising prices d. all of the above Answer Key 1. b 2. d 3. c 4. c 5. d 6. a 7. b 8. c 9. c 10.b 11.c 12.a 13.c 14.b 15.a 16.c 17.c 18.b 19.a 20.d 21.b 22.a 23.c 24.a 25.b 26.a 27.c 28.d 29.a 30.b 31.b 32.d 33.d 34.a 35.c 36.d 37.a 38.b 39.c 40.a 41.d 42.d 43.b 44.a 45.a 46.a 47.c 48.d 49.b 50.d 51.d 52.b 53.d 54.b 55.a 56.c 57.b 58.d 59.a 60.c 61.a 62.b 63.c 64.c 65.d 66.c 67.d


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