The Price-Performance Ratio Quiz
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Questions and Answers

Which term is often used interchangeably with price-performance ratio in economics, engineering, business management, and marketing?

  • Performance/cost
  • Cost-performance (correct)
  • Cost-benefit
  • Capability/price
  • What does a lower price/performance ratio indicate on a demand curve?

  • Higher desirability (correct)
  • Lower desirability
  • Inconsistent impact on desirability
  • No impact on desirability
  • What is the opposite ratio to price/performance ratio when price performance is improved?

  • Performance/price (correct)
  • Price ratio
  • Performance ratio
  • Price/performance
  • Which type of products have become more effective and cheaper over time according to the text?

    <p>Electronic gadgets</p> Signup and view all the answers

    Which products have only increased in price according to the text?

    <p>Paper-based products and fossil fuel-dependent products</p> Signup and view all the answers

    Which factor can negate the plummeting costs of certain products in certain regions?

    <p>Prevailing inflation rate</p> Signup and view all the answers

    What effect does the prevailing inflation rate have on costs in different regions?

    <p>Keeps costs high in certain areas and low in others</p> Signup and view all the answers

    What does a positive cost-performance ratio indicate in the business world?

    <p>Costs are running under budget</p> Signup and view all the answers

    Which ratio measures investor response to owning a company's stock?

    <p>Market ratio</p> Signup and view all the answers

    Which financial statement is NOT used to calculate financial ratios?

    <p>Statement of changes in equity</p> Signup and view all the answers

    What is the reciprocal of a ratio that is above 1?

    <p>Below 1</p> Signup and view all the answers

    Which market price is used in certain financial ratios if shares in a company are traded?

    <p>Market price of shares</p> Signup and view all the answers

    Which ratio measures the effectiveness of a firm's use of resources by calculating the percent change in net operating income divided by the percent change in sales?

    <p>Degree of Operating Leverage (DOL)</p> Signup and view all the answers

    Which ratio quantifies the firm's ability to repay long-term debt by comparing total liabilities to total assets?

    <p>Debt ratio</p> Signup and view all the answers

    Which ratio measures investor response to owning a company's stock by dividing net earnings by the number of shares?

    <p>Earnings per share (EPS)</p> Signup and view all the answers

    Which ratio calculates the market price per share divided by the balance sheet price per share?

    <p>Price to book value ratio (P/B or PBV)</p> Signup and view all the answers

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