Pre-final exam MANAGERIAL ECONOMIC

Arselita P. Bandeco BSA-1A

1. False
2. .7
3. 1.98
4. Price Skimming
5. Prestige or premium pricing
6. Penetration pricing
7. Price takers
8. Secondary market pricing
9. Discount pricing
10. Price elasticity of demand
11. Differential pricing
12. Loss leader
13. False
14. True
15. Negotiated pricing
16. Promotional pricing
17. Special event pricing
18. Captive pricing
19. Bait pricing
20. Price lining
21. Psychological pricing
22. Bundle pricing
23. Price lining
24. Periodic discounting
25. Reference pricing
(26-35) In my own understanding the certainty concept in decision making is a state where the
decision maker is equipped with full knowledge or ideas regarding to the all available alternatives and
their effects, he/she is 100% sure of the result of his/her choices. While risk concept in decision
making is knowing only a part of the whole thing, in which a decision maker could decide objectively
through probabilities or by valuation of the probable outcomes. On the other hand, uncertainty is
having no idea, information or knowledge at all. The decision maker decides subjectively, he/she has
no data to rely on, thus one’s solely base his/her assessment making upon own opinion and
experience. To sum it all, these three concept in decision making; certainty is define as being fully
literate, risk is a state where a decision maker is partly literate, while uncertainty is a state where a
decision maker is fully illiterate about the all existing options and its impacts, and as you can observe
this is an opposite to certainty concept in decision making.
(35-40)
State of Demand Possible outcome Probability Return (%) Expected Return
BEST 20 .20 25 5
AVERAGE 15 .50 10 5
WORST 7 .30 2 0.6
TOTAL 100% 10.6
SUMMATION: E(R)=∑(Pi x Xi)
=.20(25)+.50(10)+.30(2)
=5+5+0.6
=10.6