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PRAXIS Praxis Business Education: Content Knowledge (5101)Exam Sample Questions (Q68-Q73):

NEW QUESTION # 68
Which of the following best describes the market structure of the soft drink industry?

A. An oligopoly that carries tight government restrictions
B. An oligopoly that requires a huge upfront investment
C. A monopoly that suffers from excessive competition
D. A monopoly that restricts further competition

Answer: B

Explanation:
The soft drink industry is an oligopoly, dominated by a few major firms (e.g., Coca-Cola, PepsiCo), requiring significant upfront investment for production, branding, and distribution. Option A is incorrect, as government restrictions are not uniquely tight. Option B (monopoly) is incorrect, as multiple firms compete.
Option D (monopoly with excessive competition) is contradictory and incorrect. This question falls under the Economics category, focusing on market structures.
Reference:ETS Praxis Business Education: Content Knowledge (5101) Study Companion, Section on Economics; Industrial Organization, Chapter 7.

NEW QUESTION # 69
Distribution, pricing, and promotion of the product are presented in which section of the business plan?

A. Merchandising
B. Marketing
C. Organization
D. Production

Answer: B

Explanation:
The marketing section of a business plan outlines strategies for distribution (how the product reaches customers), pricing (cost to customers), and promotion (advertising and sales efforts). Option B (production) focuses on manufacturing processes. Option C (merchandising) is a retail function, not a business plan section. Option D (organization) covers management structure. This question falls under the Management and Marketing category, focusing on business planning.
Reference:ETS Praxis Business Education: Content Knowledge (5101) StudyCompanion, Section on Management and Marketing; Entrepreneurship: Starting and Operating a Small Business, Chapter 7.

NEW QUESTION # 70
Which of the following is the best example of eminent domain?

A. The local government tells homeowners that they may not build a multifamily dwelling in an area containing only single-family dwellings.
B. The state government grants property ownership to homeowners who discover the property line runs through the middle of their home.
C. The state government intends to build a ramp to the highway and takes privately owned land to complete the building project.
D. The local government lays pipeline beneath the surface of privately owned land.

Answer: C

Explanation:
Eminent domain is the government's power to take private property for public use, with compensation, such as taking land to build a highway ramp. Option B (zoning restriction) is a regulatory action, not eminent domain. Option C (pipeline) could involve eminent domain but is less clear without mention of compensation or taking. Option D (granting ownership) is unrelated to eminent domain. This question falls under the Business Law category, emphasizing property law.
Reference:ETS Praxis Business Education: Content Knowledge (5101) Study Companion, Section on Business Law; Business Law: Text and Cases, Chapter 24.

NEW QUESTION # 71
The term "laissez-faire" is primarily associated with a

A. free enterprise economic system
B. command economic system
C. planned economic system
D. mixed economic system

Answer: A

Explanation:
Laissez-faire, meaning "let it be," is associated with a free enterprise economic system, where government intervention is minimal, and markets operate based on supply and demand. Option B (command) involves central planning, the opposite of laissez-faire. Option C (mixed) combines elements of various systems, not purely laissez-faire. Option D (planned) is similar to command, with significant government control. This question aligns with the Economics category, focusing on economic systems.
Reference:ETS Praxis Business Education: Content Knowledge (5101) Study Companion, Section on Economics; Principles of Economics, Chapter 2.

NEW QUESTION # 72
A college graduate wants to start a business and looks into franchise opportunities. The graduate has $30,000 and has narrowed the selection to three different franchise choices. Which of the following franchise credentials is the most important to review?

A. Franchise disclosure document
B. Broker policy agreement
C. Owner's handbook
D. Fee schedule agreement

Answer: A

Explanation:
The Franchise Disclosure Document (FDD) is a legal document required by the Federal Trade Commission, providing detailed information about the franchisor, including fees, obligations, financial performance, and risks. It is critical for evaluating franchise opportunities. Option A (owner's handbook) is operational, not a credential. Option B (fee schedule agreement) is part of the FDD but not comprehensive. Option C (broker policy agreement) is not a standard franchise document. This question falls under the Entrepreneurship category, focusing on franchise evaluation.
Reference:ETS Praxis Business Education: Content Knowledge (5101) Study Companion, Section on Entrepreneurship; Entrepreneurship: Starting and Operating a Small Business, Chapter 5.

NEW QUESTION # 73
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