MKT 300 EXAM TEST ACTUAL PAPER QUESTIONS AND
ANSWERS FIRM A+
✔✔How is viewership measured? - ✔✔- ~20,000 US homes are members of a Nielsen
panel (invitations are sent at random)
- "Peoplemeter" is attached to their TV(s)
- Each member of the home has their own remote, which they use to indicate that they
are watching
- Panel members trained to turn off TV when not watching; lots of attention checks
✔✔Limitations of Nielsen Ratings - ✔✔Out of home viewing, undercounted during
pandemic
✔✔Pause Ads - ✔✔When you pause a show, movie, or live stream, the screen displays
a static or lightly animated advertisement instead of just freezing the frame.
✔✔Two options for media buying - ✔✔CPM or CPC
✔✔CPM - ✔✔-cost per thousand impressions (ex: display ads, social media ds, video
ads)
-typically costs: $1-$15
✔✔CPC - ✔✔-Cost per click (ex: search)
-Typically costs: $1-$5
✔✔How to media buy online - ✔✔-Most online ads are sold by auction ("programmatic"
ad buying)
-Publisher finds/shares info on you (based on current and past clicks)
-Advertisers algorithmically make bids to serve ads to that user
-Entire process completes in 200 milliseconds
✔✔What is a new trend in search results? - ✔✔Sponsored search results are becoming
harder to distinguish from organic search results
✔✔What disclosure do sponsored links need to follow? - ✔✔Must have Ad label but
even the minimal "Ad" disclosure on Google is getting less prominent
✔✔Warby Parker Ad Lawsuit - ✔✔-When people googled 1-800 contacts, WP paid to
serve them a WP ad
-The claim: people who clicked this ad were taken to a WP page designed to mimic 1-
800 Contacts, which did not look like other WP pages
, ✔✔What is consumer surplus? - ✔✔perceived value, max willingness to pay-price paid
✔✔producer surplus - ✔✔price paid-unit variable cost
✔✔Common way to cut costs - ✔✔Shrinkflation, skimpflation, increase price, increase
WTP and price
✔✔What do consumers remember about package size, product weight, and price? -
✔✔Consumers are far more sensitive to changes in package prices compared to
change in net weight
✔✔Shrinkflation - ✔✔decreasing product quantity/size while maintaining or increasing
price
✔✔Skimpflation - ✔✔companies are substituting ingredients in their products often with
cheaper ones
✔✔How can firms increase prices (cutting into consumer surplus) and have consumers
rationalize it? - ✔✔- provide an explanation and reasoning behind the increase- price
components of the whole separately and offer bundling- highlight quality and
commoditize it to increase the willingness to pay
✔✔When is a price increase fair? - ✔✔-When profits are threatened
-Also fine to maintain prices when costs decrease
-Unfair to exploit shifts in demand by raising prices
✔✔What are some pricing patterns in the market? - ✔✔-Prices are often maintained
during disasters (when supplies are limited)
-Price changes are more responsive to increases in costs than to increases in demand
-Price changes are more responsive to cost increases than to cost decreases
✔✔Within a given product category, do the prices of different goods closely reflect the
costs of producing those goods? - ✔✔Not necessarily. In movies, for example, Pirates
of the Caribbean costs a lot more to make than Paranormal Activity but movie tickets
are the same price for both of these films
✔✔Price discrimination - ✔✔selling a product/service at two or more different prices that
doesn't reflect a difference in costs, but targets different WTP among consumers
✔✔1st degree price discrimination (perfect price discrimination) - ✔✔seller charges
each buyer their maximum WTP (theoretical ideal for sellers)
✔✔2nd degree price discrimination (block pricing) - ✔✔sellers will charge less for
buyers who buy in bulk
ANSWERS FIRM A+
✔✔How is viewership measured? - ✔✔- ~20,000 US homes are members of a Nielsen
panel (invitations are sent at random)
- "Peoplemeter" is attached to their TV(s)
- Each member of the home has their own remote, which they use to indicate that they
are watching
- Panel members trained to turn off TV when not watching; lots of attention checks
✔✔Limitations of Nielsen Ratings - ✔✔Out of home viewing, undercounted during
pandemic
✔✔Pause Ads - ✔✔When you pause a show, movie, or live stream, the screen displays
a static or lightly animated advertisement instead of just freezing the frame.
✔✔Two options for media buying - ✔✔CPM or CPC
✔✔CPM - ✔✔-cost per thousand impressions (ex: display ads, social media ds, video
ads)
-typically costs: $1-$15
✔✔CPC - ✔✔-Cost per click (ex: search)
-Typically costs: $1-$5
✔✔How to media buy online - ✔✔-Most online ads are sold by auction ("programmatic"
ad buying)
-Publisher finds/shares info on you (based on current and past clicks)
-Advertisers algorithmically make bids to serve ads to that user
-Entire process completes in 200 milliseconds
✔✔What is a new trend in search results? - ✔✔Sponsored search results are becoming
harder to distinguish from organic search results
✔✔What disclosure do sponsored links need to follow? - ✔✔Must have Ad label but
even the minimal "Ad" disclosure on Google is getting less prominent
✔✔Warby Parker Ad Lawsuit - ✔✔-When people googled 1-800 contacts, WP paid to
serve them a WP ad
-The claim: people who clicked this ad were taken to a WP page designed to mimic 1-
800 Contacts, which did not look like other WP pages
, ✔✔What is consumer surplus? - ✔✔perceived value, max willingness to pay-price paid
✔✔producer surplus - ✔✔price paid-unit variable cost
✔✔Common way to cut costs - ✔✔Shrinkflation, skimpflation, increase price, increase
WTP and price
✔✔What do consumers remember about package size, product weight, and price? -
✔✔Consumers are far more sensitive to changes in package prices compared to
change in net weight
✔✔Shrinkflation - ✔✔decreasing product quantity/size while maintaining or increasing
price
✔✔Skimpflation - ✔✔companies are substituting ingredients in their products often with
cheaper ones
✔✔How can firms increase prices (cutting into consumer surplus) and have consumers
rationalize it? - ✔✔- provide an explanation and reasoning behind the increase- price
components of the whole separately and offer bundling- highlight quality and
commoditize it to increase the willingness to pay
✔✔When is a price increase fair? - ✔✔-When profits are threatened
-Also fine to maintain prices when costs decrease
-Unfair to exploit shifts in demand by raising prices
✔✔What are some pricing patterns in the market? - ✔✔-Prices are often maintained
during disasters (when supplies are limited)
-Price changes are more responsive to increases in costs than to increases in demand
-Price changes are more responsive to cost increases than to cost decreases
✔✔Within a given product category, do the prices of different goods closely reflect the
costs of producing those goods? - ✔✔Not necessarily. In movies, for example, Pirates
of the Caribbean costs a lot more to make than Paranormal Activity but movie tickets
are the same price for both of these films
✔✔Price discrimination - ✔✔selling a product/service at two or more different prices that
doesn't reflect a difference in costs, but targets different WTP among consumers
✔✔1st degree price discrimination (perfect price discrimination) - ✔✔seller charges
each buyer their maximum WTP (theoretical ideal for sellers)
✔✔2nd degree price discrimination (block pricing) - ✔✔sellers will charge less for
buyers who buy in bulk
