IUPUI BUS-X100 EXAM 1 2025
QUESTIONS AND ANSWERS
An economic system in which individuals and businesses make the decisions
about what to produce and what to buy, and the market determines how much is
sold and at what prices is called a _________ economy.
A. product
B. producer's
C. command
D. market
E. planned - ....ANSWER ...-Market
The market price of peaches is currently falling. In a free-market economy, the
most likely explanation of this price change is that:
A. the government has decided to set a lower price because sellers have been price
gouging.
B. there is a surplus in the market for peaches.
C. the supply of money has increased.
....COPYRIGHT ©️ 2025 ALL RIGHTS RESERVED...TRUSTED & VERIFIED 1
,D. the equilibrium price is higher than the market price.
E. there is a shortage of peaches in the market. - ....ANSWER ...-there is a
surplus in the market for peaches
"Monopolistic competition" differs from pure competition because it can be
characterized by
A. many buyers and few sellers.
B. few buyers and many sellers.
C. product differentiation.
D. a few companies that control the market.
E. few buyers and few sellers. - ....ANSWER ...-product differentiation
Which of the following is NOT a feature of the U.S. "Free Enterprise" system?
A. Competition
B. Guaranteed income
C. Private ownership of property
D. Limited role of government
E. Profit motive - ....ANSWER ...-guaranteed income
....COPYRIGHT ©️ 2025 ALL RIGHTS RESERVED...TRUSTED & VERIFIED 2
,_______________ is a necessary and extremely important by-product of the U.S.
"Free Enterprise" system.
A. Monopoly
B. Competition
C. Communism
D. Socialism
E. Poverty - ....ANSWER ...-competition
Because it controls the world's diamond deposits, the DeBeers Consolidated
Mines, Ltd. has a(n)
A. comparative advantage.
B. advantage based on efficient production.
C. absolute advantage.
D. trade deficit.
E. trade surplus. - ....ANSWER ...-absolute advantage
In a capitalist economy, the question of what to produce is answered by
_________, and the question of how to produce is answered by _________.
A. consumers; producers
B. consumers; government
....COPYRIGHT ©️ 2025 ALL RIGHTS RESERVED...TRUSTED & VERIFIED 3
, C. producers; government
D. consumers; consumers
E. producers; producers - ....ANSWER ...-consumers; producers
By definition, nations engage in international trade because every country has a(n)
_________ advantage in some product or service.
A. comparative
B. absolute
C. relative
D. superior
E. inferior - ....ANSWER ...-comparative
The markets for detergent, beer, and cigarettes all are dominated sellers who
differentiate their products. These markets are best described as:
A. monopolistic competition.
B. perfect competition.
C. an oligopoly.
D. a legal monopoly.
E. a natural monopoly. - ....ANSWER ...-monopolistic competition
....COPYRIGHT ©️ 2025 ALL RIGHTS RESERVED...TRUSTED & VERIFIED 4
QUESTIONS AND ANSWERS
An economic system in which individuals and businesses make the decisions
about what to produce and what to buy, and the market determines how much is
sold and at what prices is called a _________ economy.
A. product
B. producer's
C. command
D. market
E. planned - ....ANSWER ...-Market
The market price of peaches is currently falling. In a free-market economy, the
most likely explanation of this price change is that:
A. the government has decided to set a lower price because sellers have been price
gouging.
B. there is a surplus in the market for peaches.
C. the supply of money has increased.
....COPYRIGHT ©️ 2025 ALL RIGHTS RESERVED...TRUSTED & VERIFIED 1
,D. the equilibrium price is higher than the market price.
E. there is a shortage of peaches in the market. - ....ANSWER ...-there is a
surplus in the market for peaches
"Monopolistic competition" differs from pure competition because it can be
characterized by
A. many buyers and few sellers.
B. few buyers and many sellers.
C. product differentiation.
D. a few companies that control the market.
E. few buyers and few sellers. - ....ANSWER ...-product differentiation
Which of the following is NOT a feature of the U.S. "Free Enterprise" system?
A. Competition
B. Guaranteed income
C. Private ownership of property
D. Limited role of government
E. Profit motive - ....ANSWER ...-guaranteed income
....COPYRIGHT ©️ 2025 ALL RIGHTS RESERVED...TRUSTED & VERIFIED 2
,_______________ is a necessary and extremely important by-product of the U.S.
"Free Enterprise" system.
A. Monopoly
B. Competition
C. Communism
D. Socialism
E. Poverty - ....ANSWER ...-competition
Because it controls the world's diamond deposits, the DeBeers Consolidated
Mines, Ltd. has a(n)
A. comparative advantage.
B. advantage based on efficient production.
C. absolute advantage.
D. trade deficit.
E. trade surplus. - ....ANSWER ...-absolute advantage
In a capitalist economy, the question of what to produce is answered by
_________, and the question of how to produce is answered by _________.
A. consumers; producers
B. consumers; government
....COPYRIGHT ©️ 2025 ALL RIGHTS RESERVED...TRUSTED & VERIFIED 3
, C. producers; government
D. consumers; consumers
E. producers; producers - ....ANSWER ...-consumers; producers
By definition, nations engage in international trade because every country has a(n)
_________ advantage in some product or service.
A. comparative
B. absolute
C. relative
D. superior
E. inferior - ....ANSWER ...-comparative
The markets for detergent, beer, and cigarettes all are dominated sellers who
differentiate their products. These markets are best described as:
A. monopolistic competition.
B. perfect competition.
C. an oligopoly.
D. a legal monopoly.
E. a natural monopoly. - ....ANSWER ...-monopolistic competition
....COPYRIGHT ©️ 2025 ALL RIGHTS RESERVED...TRUSTED & VERIFIED 4
