GMAT Question of the Day - Daily to your Mailbox; hard ones only

It is currently 16 Oct 2019, 07:52

Close

GMAT Club Daily Prep

Thank you for using the timer - this advanced tool can estimate your performance and suggest more practice questions. We have subscribed you to Daily Prep Questions via email.

Customized
for You

we will pick new questions that match your level based on your Timer History

Track
Your Progress

every week, we’ll send you an estimated GMAT score based on your performance

Practice
Pays

we will pick new questions that match your level based on your Timer History

Not interested in getting valuable practice questions and articles delivered to your email? No problem, unsubscribe here.

Close

Request Expert Reply

Confirm Cancel

According to economic signaling theory, consumers may perceive the

  new topic post reply Question banks Downloads My Bookmarks Reviews Important topics  
Author Message
TAGS:

Hide Tags

Find Similar Topics 
Senior Manager
Senior Manager
User avatar
Status: Making every effort to create original content for you!!
Joined: 23 Dec 2010
Posts: 465
Location: United States
Concentration: Healthcare, Social Entrepreneurship
GMAT 1: 660 Q48 V34
GMAT 2: 750 Q49 V42
GMAT ToolKit User
According to economic signaling theory, consumers may perceive the  [#permalink]

Show Tags

New post Updated on: 15 Aug 2019, 21:15
17
16
Question 1
00:00
A
B
C
D
E

based on 1247 sessions

89% (02:18) correct 11% (02:23) wrong

HideShow timer Statistics

Question 2
00:00
A
B
C
D
E

based on 1181 sessions

62% (01:06) correct 38% (01:17) wrong

HideShow timer Statistics

Question 3
00:00
A
B
C
D
E

based on 1132 sessions

89% (01:18) correct 11% (01:45) wrong

HideShow timer Statistics

Question 4
00:00
A
B
C
D
E

based on 1130 sessions

82% (01:01) correct 18% (01:22) wrong

HideShow timer Statistics

Question 5
00:00
A
B
C
D
E

based on 1099 sessions

67% (01:23) correct 33% (01:37) wrong

HideShow timer Statistics

According to economic signaling theory, consumers may perceive the frequency with which an unfamiliar brand is advertised as a cue that the brand is of high quality. The notion that highly advertised brands are associated with high-quality products does have some empirical support. Marquardt and McGann found that heavily advertised products did indeed rank high on certain measures of product quality. Because large advertising expenditures represent a significant investment on the part of a manufacturer, only companies that expect to recoup these costs in the long run, through consumers' repeat purchases of the product, can afford to spend such amounts.

However, two studies by Kirmani have found that although consumers initially perceive expensive advertising as a signal of high brand quality, at some level of spending the manufacturer's advertising effort may be perceived as unreasonably high, implying low manufacturer confidence in product quality. If consumers perceive excessive advertising effort as a sign of a manufacturer's desperation, the result may be less favorable brand perceptions. In addition, a third study by Kirmani, of print advertisements, found that the use of color affected consumer perception of brand quality. Because consumers recognize that color advertisements are more expensive than black and white, the point at which repetition of an advertisement is perceived as excessive comes sooner for a color advertisement than for a black-and-white advertisement.
1) Which of the following best describes the purpose of the highlight sentence?

(A) To Show that economic signaling theory fails to explain a finding
(B) To introduce a distinction not accounted for by economic signaling theory
(C) To account for an exception to a generalization suggested by Marquardt and McGann
(D) To explain why Marquardt and McGann's research was conducted
(E) To offer an explanation for an observation reported by Marquardt and McGann

Spoiler: :: OA
E


2) The primary purpose of the passage is to

(A) present findings that contradict one explanation for the effects of a particular advertising practice
(B) argue that theoretical explanations about the effects of a particular advertising practice are of limited value without empirical evidence
(C) discuss how and why particular advertising practices may affect consumers' perceptions
(D) contrast the research methods used in two different studies of a particular advertising practice
(E) explain why a finding about consumer responses to a particular advertising practice was unexpected

Spoiler: :: OA
C


3) Kirmani's research, as described in the passage, suggests which of the following regarding consumers' expectations about the quality of advertised products?

(A) Those expectations are likely to be highest if a manufacturer runs both black-and-white and color advertisements for the same product.
(B) Those expectations can be shaped by the presence of color in an advertisement as well as by the frequency with which an advertisement appears.
(C) Those expectations are usually high for frequently advertised new brands but not for frequently advertised familiar brands.
(D) Those expectations are likely to be higher for products whose black-and-white advertisements are often repeated than for those whose color advertisements are less often repeated.
(E) Those expectations are less definitively shaped by the manufacturer's advertisements than by information that consumers gather from other sources.

Spoiler: :: OA
B


4) Kirmani's third study, as described in the passage, suggests which of the following conclusions about a black-and-white advertisement?

(A) It can be repeated more frequently than a comparable color advertisement could before consumers begin to suspect low manufacturer confidence in the quality of the advertised product.
(B) It will have the greatest impact on consumers' perceptions of the quality of the advertised product if it appears during periods when a color version of the same advertisement is also being used.
(C) It will attract more attention from readers of the print publication in which it appears if it is used only a few times.
(D) It may be perceived by some consumers as more expensive than a comparable color advertisement.
(E) It is likely to be perceived by consumers as a sign of higher manufacturer confidence in the quality of the advertised product than a comparable color advertisement would be.

Spoiler: :: OA
A


5) The passage suggests that Kirmani would be most likely to agree with which of the following statements about consumers' perceptions of the relationship between the frequency with which a product is advertised and the product's quality?

(A) Consumers' perceptions about the frequency with which an advertisement appears are their primary consideration when evaluating an advertisement's claims about product quality.
(B) Because most consumers do not notice the frequency of advertisement, it has little impact on most consumers' expectations regarding product quality.
(C) Consumers perceive frequency of advertisement as a signal about product quality only when the advertisement is for a product that is newly on the market.
(D) The frequency of advertisement is not always perceived by consumers to indicate that manufacturers are highly confident about their products' quality.
(E) Consumers who try a new product that has been frequently advertised are likely to perceive the advertisement's frequency as having been an accurate indicator of the product's quality.

Spoiler: :: OA
D



JOURNAL ARTICLE
Advertising Repetition as a Signal of Quality: If It's Advertised so Much, Something Must Be Wrong
Amna Kirmani
Journal of Advertising
Vol. 26, No. 3 (Autumn, 1997), pp. 77-86
Published by: Taylor & Francis, Ltd.
https://www.jstor.org/stable/4189043
Page Count: 10

_________________

Originally posted by Vercules on 28 Mar 2013, 03:54.
Last edited by SajjadAhmad on 15 Aug 2019, 21:15, edited 5 times in total.
Updated - Complete topic (160).
Manager
Manager
User avatar
Status: Final Lap
Joined: 25 Oct 2012
Posts: 227
Concentration: General Management, Entrepreneurship
GPA: 3.54
WE: Project Management (Retail Banking)
Re: According to economic signaling theory, consumers may perceive the  [#permalink]

Show Tags

New post 01 Apr 2013, 07:11
2
Hi samvit

2) The primary purpose of the passage is to

A) present findings that contradict one explanation for the effects of a particular advertising practice
Wrong: The passage is not dealing with a particular advertising practice BUT with severel ones ( i.e advertising heavily , use of color ...)

B) argue that theoretical explanations about the effects of a particular advertising practice are of limited value without empirical evidence
Wrong: same issue as A

C) discuss how and why particular advertising practices may affect consumers' perceptions
Correct:
First paragraph: 1st particular advertising practice: advertising heavily
How: According to economic signaling theory, consumers may perceive the frequency with which an unfamiliar brand is advertised as a cue that the brand is of high quality.
Why: Because large advertising expenditures represent a significant .....

Second paragraph: Another particular advertising practice: printed advertisements
How: use of color affected consumer perception of brand quality.
Why: Because consumers recognize that color advertisements are more expensive ....

D) contrast the research methods used in two different studies of a particular advertising practice
Wrong: same issue as A and B

E) explain why a finding about consumer responses to a particular advertising practice was unexpected
Wrong: same issue

Always read the questions carefully ....

Hope that helps
:)
_________________
KUDOS is the good manner to help the entire community.

"If you don't change your life, your life will change you"
Manager
Manager
User avatar
B
Joined: 30 Jul 2014
Posts: 106
GPA: 3.72
Reviews Badge
Re: According to economic signaling theory, consumers may perceive the  [#permalink]

Show Tags

New post 21 Jul 2017, 03:22
1) Which of the following best describes the purpose of the highlight sentence?
A) To Show that economic signaling theory fails to explain a finding
B) To introduce a distinction not accounted for by economic signaling theory
C) To account for an exception to a generalization suggested by Marquardt and McGann
D) To explain why Marquardt and McGann's research was conducted
E) To offer an explanation for an observation reported by Marquardt and McGann

From the lines - "Marquardt and McGann found that heavily advertised products did indeed rank high on certain measures of product quality. Because"
we know that the highlighted portion explains the observation by M&M.
IMO, E should be the answer.


2) The primary purpose of the passage is to
A) present findings that contradict one explanation for the effects of a particular advertising practice
<this is done only in the second paragraph, not a primary purpose of the passage as a whole - incorrect >

B) argue that theoretical explanations about the effects of a particular advertising practice are of limited value without empirical evidence
<it has nowhere mentioned or implied - incorrect >

C) discuss how and why particular advertising practices may affect consumers' perceptions
<seems correct >

D) contrast the research methods used in two different studies of a particular advertising practice
<research methods are nowhere contrasted - out of scope - incorrect >

E) explain why a finding about consumer responses to a particular advertising practice was unexpected
<passage presents different findings by few researchers ; there are more than one practices - incorrect >


3) Kirmani's research, as described in the passage, suggests which of the following regarding consumers' expectations about the quality of advertised products?
A) Those expectations are likely to be highest if a manufacturer runs both black-and-white and color advertisements for the same product.
<highest - out of scope - incorrect >

B) Those expectations can be shaped by the presence of color in an advertisement as well as by the frequency with which an advertisement appears.
<Seems correct with reference to the lines "advertising effort may be perceived as unreasonably high, implying low manufacturer confidence in product quality. If consumers perceive excessive advertising effort as a sign of a manufacturer's desperation, the result may be less favorable brand perceptions" >

C) Those expectations are usually high for frequently advertised new brands but not for frequently advertised familiar brands.
<no such comparison has been made - incorrect >

D) Those expectations are likely to be higher for products whose black-and-white advertisements are often repeated than for those whose color advertisements are less often repeated.
<wrong comparison - incorrect >

E) Those expectations are less definitively shaped by the manufacturer's advertisements than by information that consumers gather from other sources.
<polar opposite - "other sources" - out of scope - incorrect>

4) Kirmani's third study, as described in the passage, suggests which of the following conclusions about a black-and-white advertisement?
A) It can be repeated more frequently than a comparable color advertisement could before consumers begin to suspect low manufacturer confidence in the quality of the advertised product.
<Seems correct by referring the lines mentioned in the last paragraph - correct>

B) It will have the greatest impact on consumers' perceptions of the quality of the advertised product if it appears during periods when a color version of the same advertisement is also being used.
<"greatest impact" nowhere mentioned - incorrect >

C) It will attract more attention from readers of the print publication in which it appears if it is used only a few times.
<out of scope - "more attention from specific readers" -incorrect >

D) It may be perceived by some consumers as more expensive than a comparable color advertisement.
<wrong comparison - incorrect >

E) It is likely to be perceived by consumers as a sign of higher manufacturer confidence in the quality of the advertised product than a comparable color advertisement would be.
<frequency is the key differentiation not simply the color or B&W print - incorrect >

5) The passage suggests that Kirmani would be most likely to agree with which of the following statements about consumers' perceptions of the relationship between the frequency with which a product is advertised and the product's quality?
A) Consumers' perceptions about the frequency with which an advertisement appears are their primary consideration when evaluating an advertisement's claims about product quality.
<"primary consideration" - out of scope - incorrect >

B) Because most consumers do not notice the frequency of advertisement, it has little impact on most consumers' expectations regarding product quality.
<out of scope - incorrect >

C) Consumers perceive frequency of advertisement as a signal about product quality only when the advertisement is for a product that is newly on the market.
<"new product" - out of scope - incorrect >

D) The frequency of advertisement is not always perceived by consumers to indicate that manufacturers are highly confident about their products' quality.
<Correct summary of the the combination of the two theories - correct >

E) Consumers who try a new product that has been frequently advertised are likely to perceive the advertisement's frequency as having been an accurate indicator of the product's quality.
<as per the passage - advertisement too often is negatively perceived, hence incorrect >

Please let me know your views where you think I have missed the point.
_________________
A lot needs to be learned from all of you.
Manager
Manager
User avatar
S
Status: Aiming MBA!!
Joined: 19 Aug 2017
Posts: 102
Location: India
GMAT 1: 620 Q49 V25
GPA: 3.75
WE: Web Development (Consulting)
Reviews Badge
Re: According to economic signaling theory, consumers may perceive the  [#permalink]

Show Tags

New post 21 Oct 2017, 05:23
1
1
I just want to highlight the mistake that I did while solving question 2, learning from this mistake can be critical for someone else out there. :)

2) The primary purpose of the passage is to

A) present findings that contradict one explanation for the effects of a particular advertising practice
I picked this option in my first attempt. But after reading closely and between the lines, I found out that it can be a trap answer if not read properly.

Picking the portion of passage which clearly indicates that the findings do not contradict the above explanation completely,
However, two studies by Kirmani have found that although consumers initially perceive expensive advertising as a signal of high brand quality, at some level of spending the manufacturer's advertising effort may be perceived as unreasonably high, implying low manufacturer confidence in product quality.
Verbal Forum Moderator
User avatar
V
Status: Greatness begins beyond your comfort zone
Joined: 08 Dec 2013
Posts: 2400
Location: India
Concentration: General Management, Strategy
Schools: Kelley '20, ISB '19
GPA: 3.2
WE: Information Technology (Consulting)
GMAT ToolKit User Reviews Badge CAT Tests
Re: According to economic signaling theory, consumers may perceive the  [#permalink]

Show Tags

New post 21 Oct 2017, 07:45
1
AnubhavK wrote:
I got E, C, B, A, and A. Looking for explanation on the last one. Thanks.


Hi AnubhavK,

5) The passage suggests that Kirmani would be most likely to agree with which of the following statements about consumers' perceptions of the relationship between the frequency with which a product is advertised and the product's quality?

Signaling Theory: frequency of ads and product's quality are positively correlated
Kirmani's finding: Beyond a certain threshold, consumers find ads to be excessive and thus think less of a product's quality
.

A) Consumers' perceptions about the frequency with which an advertisement appears are their primary consideration when evaluating an advertisement's claims about product quality. - Incorrect - nowhere in passage it has been mentioned that frequency of advertisement is a primary consideration
B) Because most consumers do not notice the frequency of advertisement, it has little impact on most consumers' expectations regarding product quality. - Incorrect - the passage does not mention whether most consumers notice the frequency of advertisement or not
C) Consumers perceive frequency of advertisement as a signal about product quality only when the advertisement is for a product that is newly on the market. - Incorrect
D) The frequency of advertisement is not always perceived by consumers to indicate that manufacturers are highly confident about their products' quality. - Correct
E) Consumers who try a new product that has been frequently advertised are likely to perceive the advertisement's frequency as having been an accurate indicator of the product's quality. - Incorrect - this goes against Kirmani's findings

Answer D

Hope this helps!! :-)
_________________
When everything seems to be going against you, remember that the airplane takes off against the wind, not with it. - Henry Ford
The Moment You Think About Giving Up, Think Of The Reason Why You Held On So Long
Verbal Forum Moderator
User avatar
V
Status: Greatness begins beyond your comfort zone
Joined: 08 Dec 2013
Posts: 2400
Location: India
Concentration: General Management, Strategy
Schools: Kelley '20, ISB '19
GPA: 3.2
WE: Information Technology (Consulting)
GMAT ToolKit User Reviews Badge CAT Tests
Re: According to economic signaling theory, consumers may perceive the  [#permalink]

Show Tags

New post 21 Oct 2017, 08:34
2
1) Which of the following best describes the purpose of the highlight sentence?
E) To offer an explanation for an observation reported by Marquardt and McGann - Marquardt and McGann observed that there was a correlation between the frequency of advertisements for a product and that product's quality. The highlighted sentence explains why this correlation exists - because high levels of investment in a product suggests confidence in the product's quality.

2) The primary purpose of the passage is to
C) discuss how and why particular advertising practices may affect consumers' perceptions - This passage details a host of different advertising practices: frequent vs infrequent advertisements; color vs black and white advertisements with respect to frequency, etc. We then receive explanations for how consumers respond in each of these scenarios.

3) Kirmani's research, as described in the passage, suggests which of the following regarding consumers' expectations about the quality of advertised products?
B) Those expectations can be shaped by the presence of color in an advertisement as well as by the frequency with which an advertisement appears. - Kirmani discovered that beyond a critical threshold, additional advertising seems to hurt perceptions of a product's quality. Kirmani also noted that this threshold seemed lower for color advertisements than print advertisements. So color and frequency both play a role in product perceptions.

4) Kirmani's third study, as described in the passage, suggests which of the following conclusions about a black-and-white advertisement?
A) It can be repeated more frequently than a comparable color advertisement could before consumers begin to suspect low manufacturer confidence in the quality of the advertised product. - The last line of the passage informs us that because color ads are more expensive, the point at which color ads seem to be excessive comes sooner than it does for black and white ads.
_________________
When everything seems to be going against you, remember that the airplane takes off against the wind, not with it. - Henry Ford
The Moment You Think About Giving Up, Think Of The Reason Why You Held On So Long
SC Moderator
User avatar
V
Joined: 23 Sep 2015
Posts: 1716
GMAT ToolKit User Premium Member Reviews Badge
Re: According to economic signaling theory, consumers may perceive the  [#permalink]

Show Tags

New post 07 Oct 2018, 11:58
P1 - frequently advertised brand means good one. but it is actually a bit better so that cost invested on ads can be obtained.
P2 - 3 studies by K for factors affect consumers.

1) Which of the following best describes the purpose of the highlight sentence?
PT - these lines are explaining prior sentence.
E) To offer an explanation for an observation reported by Marquardt and McGann -

---------------------------------------

2) The primary purpose of the passage is to
A) present findings that contradict one explanation for the effects of a particular advertising practice - no
B) argue that theoretical explanations about the effects of a particular advertising practice are of limited value without empirical evidence - no
C) discuss how and why particular advertising practices may affect consumers' perceptions - seems like best choice covering whole thing.
D) contrast the research methods used in two different studies of a particular advertising practice - no
E) explain why a finding about consumer responses to a particular advertising practice was unexpected - no;

-------------------------------------------

3) Kirmani's research, as described in the passage, suggests which of the following regarding consumers' expectations about the quality of advertised products?'

the point at which repetition of an advertisement is perceived as excessive comes sooner for a color advertisement than for a black-and-white advertisement.

B) Those expectations can be shaped by the presence of color in an advertisement as well as by the frequency with which an advertisement appears. -

------------------------------------

4) Kirmani's third study, as described in the passage, suggests which of the following conclusions about a black-and-white advertisement?

a third study by Kirmani, of print advertisements, found that the use of color affected consumer perception of brand quality. Because consumers recognize that color advertisements are more expensive than black and white, the point at which repetition of an advertisement is perceived as excessive comes sooner for a color advertisement than for a black-and-white advertisement.


A) It can be repeated more frequently than a comparable color advertisement could before consumers begin to suspect low manufacturer confidence in the quality of the advertised product.

-------------------------------------

5) The passage suggests that Kirmani would be most likely to agree with which of the following statements about consumers' perceptions of the relationship between the frequency with which a product is advertised and the product's quality?

However, two studies by Kirmani have found that although consumers initially perceive expensive advertising as a signal of high brand quality, at some level of spending the manufacturer's advertising effort may be perceived as unreasonably high, implying low manufacturer confidence in product quality.

D) The frequency of advertisement is not always perceived by consumers to indicate that manufacturers are highly confident about their products' quality.
_________________
Thanks!
Do give some kudos.

Simple strategy:
“Once you’ve eliminated the impossible, whatever remains, however improbable, must be the truth.”

Want to improve your Score:
GMAT Ninja YouTube! Series 1| GMAT Ninja YouTube! Series 2 | How to Improve GMAT Quant from Q49 to a Perfect Q51 | Time management

My Notes:
Reading comprehension | Critical Reasoning | Absolute Phrases | Subjunctive Mood
SVP
SVP
User avatar
V
Joined: 26 Mar 2013
Posts: 2347
Reviews Badge CAT Tests
Re: According to economic signaling theory, consumers may perceive the  [#permalink]

Show Tags

New post 14 Feb 2019, 13:45
I would like to understand the error in choice A in question 2 about primary purpose of the passage.

Thanks
GMAT Club Verbal Expert
User avatar
D
Status: GMAT and GRE tutor
Joined: 13 Aug 2009
Posts: 2857
Location: United States
GMAT 1: 780 Q51 V46
GMAT 2: 800 Q51 V51
GRE 1: Q170 V170
Re: According to economic signaling theory, consumers may perceive the  [#permalink]

Show Tags

New post 11 Mar 2019, 11:44
Mo2men wrote:
I would like to understand the error in choice A in question 2 about primary purpose of the passage.

Thanks

Question 2 asks us to find the primary purpose of the passage. Let's take a look the answer choice in question:
Quote:
(A) present findings that contradict one explanation for the effects of a particular advertising practice

To understand this answer choice, try to map each component of the statement to the most relevant piece of the passage:

  • "[The primary purpose of the passage is to] present findings that contradict one explanation": In the second paragraph, the author does present findings that contradict information presented in the first paragraph. The "explanation" that is contradicted is economic signaling theory. OK so far.
  • "for the effects of a particular advertising practice": Here is where we run into a problem. What is this "particular advertising practice"? The author mentions several practices (excessive advertising effort, black and white vs. color printed advertisements, etc). Which is the specific practice referred to by this answer choice?

The author's primary purpose is not to contradict an explanation for one particular advertising practice, so (A) is not the correct answer for question 2.

Compare that to answer choice (C):
Quote:
(C) discuss how and why particular advertising practices may affect consumers' perceptions

This answer choice accurately captures the primary purpose of the passage. In the first paragraph, the author introduces economic signaling theory to explain how consumers may perceive different levels of advertising by a brand. In the second paragraph, the author discusses how consumers actually perceive brands that use particular advertising practices, which does not always align with the results predicted by economic signaling theory. (C) is the right answer for question 2.

I hope that helps!
_________________
GMAT/GRE tutor @ www.gmatninja.com (we're hiring!) | GMAT Club Verbal Expert | Instagram | Blog | Bad at PMs

Beginners' guides to GMAT verbal: RC | CR | SC

YouTube LIVE verbal webinars: Series 1: Fundamentals of SC & CR | Series 2: Developing a Winning GMAT Mindset

SC articles & resources: How to go from great (760) to incredible (780) on GMAT SC | That "-ing" Word Probably Isn't a Verb | That "-ed" Word Might Not Be a Verb, Either | No-BS Guide to GMAT Idioms | "Being" is not the enemy | WTF is "that" doing in my sentence?

RC, CR, and other articles & resources: All GMAT Ninja articles on GMAT Club | Using LSAT for GMAT CR & RC |7 reasons why your actual GMAT scores don't match your practice test scores | How to get 4 additional "fake" GMAT Prep tests for $29.99 | Time management on verbal

SC & CR Questions of the Day (QOTDs), featuring expert explanations: All QOTDs | Subscribe via email | RSS

Need an expert reply? Hit the request verbal experts' reply button; be specific about your question, and tag @GMATNinja. Priority is always given to official GMAT questions.
GMAT Club Bot
Re: According to economic signaling theory, consumers may perceive the   [#permalink] 11 Mar 2019, 11:44
Display posts from previous: Sort by

According to economic signaling theory, consumers may perceive the

  new topic post reply Question banks Downloads My Bookmarks Reviews Important topics  





Powered by phpBB © phpBB Group | Emoji artwork provided by EmojiOne