2018 Entrepreneurship Exam

While brainstorming ideas for a new business venture, Shane's first suggestion is opening a new pizza parlor. Which of the following is the most appropriate response to Shane's suggestion: A. "What if we served pizza and gelato?" B. "There are already too many pizza chains." C. "That's a great idea! Let's do it!" D. "I'm not sure there's a market for that."

A. "What if we served pizza and gelato?"

A unique selling proposition answers which of the following customer questions: A. "Why should I buy from you instead of someone else?" B. "What is the name of this product?" C. "Who makes this product?" D. "Why is this good or service a great value for me?"

A. "Why should I buy from you instead of someone else?"

A mission statement can be thought of as the __________ of the business strategy. A. "why" B. "who" C. "when" D. "how"

A. "why"

What does it mean to coordinate a business's resources? A. Using all of a company's resources at the same time B. Being strategic about how resources are used C. Ordering raw materials from the same suppliers D. Saving some resources each month for later use

B. Being strategic about how resources are used

Which of the following is an external factor that might affect sales forecasting: A. A social media advertising push B. A new product release C. Regulatory changes D. Shifts in pricing strategy

C. Regulatory changes

In corporate governance, oversight of management, segregation of control, and policy development are all examples of A. external control mechanisms. B. tasks of the board of directors. C. internal control mechanisms. D. transparency in management.

C. internal control mechanisms.

The goal of most marketing productions is to communicate with A. all consumers B. business partners C. target audiences D. competitors

C. target audiences

Nora wants to manage an organization that is focused on growth, but for years, her company's board of directors has been focused on merely staying afloat. Nora must slowly introduce her ideas for growth due to the influence of A. her own limitations. B. the market. C. the external macro-environment. D. the company's internal environment.

D. the company's internal environment.

Which of the following financing strategies is considered a form of bootstrapping that an entrepreneur might use to help with the cost of starting a business: A. Taking out a personal loan to initially fund the business B. Bartering to exchange services with suppliers C. Using personal savings to pay for start-up costs D. Forming a partnership with a family member

B. Bartering to exchange services with suppliers

Why is it important for an organization to consult external data when trying to determine a new pricing strategy? A. External data are more reliable. B. External data provide information about competition and market demand. C. Internal data are not reliable. D. External data provide information about a company's forecasted and actual sales.

B. External data provide information about competition and market demand.

What should a company review to determine whether the business is profitable? A. Accounts receivable ledger B. Income statement C. Cash flow statement D. Monthly sales receipts

B. Income statement

Which of the following is the most likely reason why some established, successful companies with popular consumer products don't use coupons to increase sales: A. Coupons are expensive to create and distribute. B. Loyal customers purchase products without coupons. C. Customers equate discounts with lower quality. D. Customers become angry when coupons expire.

B. Loyal customers purchase products without coupons.

Rae hired engineers to develop her new robotic coffee maker. Before the product is released, how can Rae keep the engineers from sharing her idea with others? A. Patents B. Non-disclosure agreements C. Copyright D. Trademarks

B. Non-disclosure agreements

How can a company stop competitors from using its logo on their products? A. Create a unique design B. Obtain trademark protection C. Implement knowledge management D. Purchase an insurance policy

B. Obtain trademark protection

Evan is an introverted, thoughtful employee who likes structure and routine in his workday. Which of the following actions would help Evan's boss, Allison, bring out the best in him: A. Assigning Evan to be the leader for a large group of employees that he doesn't know B. Providing Evan with plenty of notice each time she asks him to present in a meeting C. Putting Evan in a shared cubicle with an outgoing, extroverted employee who enjoys chatting D. Asking Evan to work on a new and different project every day to keep things interesting for him

B. Providing Evan with plenty of notice each time she asks him to present in a meeting

Which management function includes providing professional development for employees? A. Organizing B. Staffing C. Controlling D. Planning

B. Staffing

Which of the following is important to keep in mind when creating a schedule for the day: A. Break up related activities. B. Stick to your set time limits. C. Keep your schedule in several different places. D. Schedule as many top-priority objectives as you can.

B. Stick to your set time limits.

A company has taken a political stance on a controversial issue to target certain consumers and increase sales, even though doing so may offend other consumers with opposing views. What type of risk is the company taking? A. Pure B. Strategic C. Operational D. Hazard

B. Strategic

Which of the following best describes the relationship between learning and innovation: A. The ability to innovate is essential for learning. B. The ability to learn is essential for innovation. C. Innovation is stifled by continuous learning. D. Learning and innovation are essentially the same.

B. The ability to learn is essential for innovation.

Risk should be managed A. on a case-by-case basis. B. as a part of business strategy. C. after an incident has occurred. D. through the purchase of insurance.

B. as a part of business strategy.

A magazine has recently shifted to an all-digital product. This decision has most likely led to the need for A. increased revenue. B. business process changes. C. new employees. D. a shift in the mission statement.

B. business process changes.

Before acquiring a smaller company, Goldenstone Bank created a plan to deal with expected shifts in company culture. This is an example of how A. acquiring another business requires resources. B. change management can reduce risk. C. change management increases costs. D. day-to-day operations are unaffected by change.

B. change management can reduce risk.

If a hurricane impacts production at a company's Atlanta plant, it will shift production demands to its plant in Arkansas. This is an example of A. risk assessment. B. continuation planning. C. SWOT analysis. D. sales forecasting.

B. continuation planning.

Gary works for a computer software company. He always keeps up on the technological advances in his industry, and he also makes sure he knows what products his competitors are developing. When Gary gathers this external information, he is participating in A. threat appraisal. B. environmental scanning. C. competition assessment. D. information collecting.

B. environmental scanning.

To evaluate how well your vendors are performing, you must first A. maintain good relationships. B. establish standards of success. C. focus on cost reduction. D. compare vendors across the industry.

B. establish standards of success.

An investor is looking at a company's business plan for a new product launch and wants to find information on the industry trends that inspired the new product's development. This investor would probably turn to the __________ section. A. product(s) offered B. market analysis C. appendices D. strategy and implementation

B. market analysis

Arnold is building a display to place in a high traffic area of his store. Arnold is most likely creating a A. trade show promotion. B. point of purchase display. C. promotional product. D. sales incentive display.

B. point of purchase display.

When businesses fail to make profits for an extended period of time, they usually A. produce more. B. shut down. C. expand facilities. D. hire employees.

B. shut down.

Anthony has worked as an IT professional at his company for three years. This year, he hopes to be moved to the social media department so that he can learn new skills and expand his professional network. After doing some research, he finds an employee within the department that he thinks he could learn a lot from. In return, he figures, he can help the employee clean up her computer and teach her the new company software. He decides to contact the employee to set up a lunch meeting. In other words, Anthony is trying to initiate a A. mentorship program. B. strategic relationship. C. relational analysis. D. private partnership.

B. strategic relationship.

Zander owns a company that buys tea from other companies in China and sells it to grocery stores. Zander's company is a(n) A. retailer. B. wholesaler. C. producer. D. industrial user.

B. wholesaler.

Which of the following best describes the relationship between buyers and sellers when it comes to product pricing: A. Like night and day B. How bees are to honey C. A game of tug-of-war D. A one-sided relationship

C. A game of tug-of-war

What is a proactive strategy a company can use to help prevent its customers' private information from being exposed to the dangers of a data breach? A. Deal with data breaches immediately B. Maintain personal data forever C. Avoid collecting unnecessary data D. Train employees how to handle data breaches

C. Avoid collecting unnecessary data

Which of the following financial records would you use to identify discrepancies within the general accounting ledger: A. Owner's equity statement B. Income statement C. Balance sheet D. Statement of cash flow

C. Balance sheet

What is an example of out-of-home media? A.Television B. Magazines C. Billboards D. Digital blogs

C. Billboards

Which of the following statements regarding customer relations is true: A. Company management has no power to create a culture of customer service. B. Low-level employees of a company have little influence on customer relations. C. Company management has the most power to create a culture of customer service. D. Low-level employees of a company have the most influence on customer relations.

C. Company management has the most power to create a culture of customer service.

Carson has an exciting idea for a new product and needs to acquire funding to start building a prototype. He does not have strong credit, but he does have a wide circle of acquaintances and contacts. What method is best suited for Carson to obtain financial resources? A. Angel investors B. Small business loan C. Crowdfunding D. Credit card

C. Crowdfunding

Diamond Select Credit Cards recorded a 90% customer satisfaction rating for the last fiscal year. What is one way to translate this measure into a financial outcome? A. Track the changes in operating margin over time B. Measure the number of customer complaints C. Determine the amount of revenue from repeat customers D. Turn customer satisfaction ratings into employee ratings

C. Determine the amount of revenue from repeat customers

Which of the following actions by a manager would most likely contribute to a positive work environment: A. Giving prizes for most hours worked B. Fostering hyper-competitiveness C. Engaging in meaningful dialogue D. Allowing employees to eat at desk

C. Engaging in meaningful dialogue

Objective setting, risk assessment, risk response, and the distribution of an action plan are all components of which of the following business practices: A. Quality assurance B. Managerial accounting C. Enterprise risk management D. Entrepreneurship

C. Enterprise risk management

When you're craving your favorite potato chips, you can find them at the grocery store, the gas station, the coffee shop, or the local market. Which distribution strategy is used by the potato chip company? A. Selective B. Exclusive C. Intensive D. Vertical

C. Intensive

What is one reason to lease a work space rather than purchasing one? A. Appreciating land values B. High credit rating C. Limited cash flow D. Control over maintenance

C. Limited cash flow

When a bank evaluates a company's capital to determine the company's ability to repay a loan, what does the bank consider? A. The personal reputation of the business owner B. The financial value of the company's assets C. Money the owner has invested into the company D. Whether the business's industry is stable or not

C. Money the owner has invested into the company

Which of the following business strategies is appropriate for a bakery to use if it wants a long product mix: A. Eliminating gift-item merchandise from its store inventory B. Only selling muffins and cookies custom ordered by customers C. Offering 24 different muffin and cookie varieties for sale D. Offering only one kind of muffins and one kind of cookies

C. Offering 24 different muffin and cookie varieties for sale

Why are news releases considered one of the most effective public relations tools? A. News sources have a broader reach than social media. B. People are willing to pay for quality news. C. People consider news sources as more trustworthy. D. News sources only report factual information.

C. People consider news sources as more trustworthy.

Lilian is starting a new business, and she needs a marketing director. Lilian's friend Tanisha recommends her husband, Diego, who has worked in marketing for over a decade. What was Lillian's recruiting source? A. Job board B. Recruiting agency C. Referral D. Digital networking

C. Referral

Which of the following statements regarding the selling function is true: A. Selling is unplanned communication. B. Selling is not personalized to the customer. C. Selling is planned communication. D. Selling usually doesn't result in future purchases.

C. Selling is planned communication.

What is a possible downside of obtaining investment from venture capitalists? A. The slow rate of growth B. Repaying the money C. Sharing company ownership D. The increased chance of failure

C. Sharing company ownership

A company wants to implement a new automated time-tracking process. Which of the following factors is most likely to affect the design of this process: A. Increased stress and fatigue B. Changes in regulation C. The cost of technology D. The company leadership

C. The cost of technology

Which of the following explains why monthly financial statements do not accurately show how much a company is worth: A. They don't show what a company spends and earns on a monthly basis. B. The data based on projected sales forecasts are not reliable. C. They do not reflect how much a company owes on unpaid liabilities. D. Earned income is not balanced by data on paid expenses.

C. They do not reflect how much a company owes on unpaid liabilities.

To protect a company's website and social media accounts from being hacked, the company should make sure that employees with authorized access A. sign a user agreement. B. use the same password. C. change passwords frequently. D. cannot post digital content.

C. change passwords frequently.

When hiring new employees, it is important to A. ask applicants their marital status. B. finish hiring as quickly as possible. C. communicate with your team first. D. request that only minorities apply.

C. communicate with your team first.

Premiere Office Supplies used to make enough revenue through existing customer reorders, but lately, many customers have begun ordering from YourOffice, a new retailer. Therefore, Premiere Office Supplies had to change its sales process to increase revenue due to A. technology. B. growth. C. competition. D. regulation.

C. competition.

The first step in an organizational risk assessment is A. pinpointing who might be harmed. B. recording and implementing your findings. C. identifying the potential hazards. D. evaluating the risks and making a plan.

C. identifying the potential hazards.

Busy mothers have been identified as frequent consumers of energy drinks. This is an example of behavioral market segmentation based on A. occasion response. B. loyalty response. C. rate of use. D. economic status.

C. rate of use.

Which of the following is true regarding risk taking: A. Risk related to staffing can be largely controlled. B. Smart businesspeople avoid risk. C. Financial risks primarily affect new businesses. D. All entrepreneurs must take risks.

D. All entrepreneurs must take risks.

Kajal owns a small business that makes homemade candles. During the past few months, the company has been struggling to pay the bills from the suppliers the company purchases from. On top of that, Kajal recently had to let go two of her employees because she couldn't afford to pay them anymore. Which of the following actions should Kajal take to produce the most positive outcome: A. Hire more effective employees to work for her B. File for bankruptcy and close down her business C. Produce fewer candles and raise the price of each D. Coordinate her company's resources more effectively

D. Coordinate her company's resources more effectively

The owner of a specialty bakery recently came across a social media post by a mother looking for a dinosaur-themed birthday cake for her son. In her post, the mother outlined the specific things she was looking for in the cake. The owner of the bakery thinks he can create the type of cake the mom is looking for. What should he do? A. Wait for the woman to contact his bakery before taking any further action B. Contact the woman via social media and ask her what she's willing to pay C. Bake the cake she described and then ask her where she would like it delivered D. Create a proposal outlining how his bakery would satisfy the client's need

D. Create a proposal outlining how his bakery would satisfy the client's need

One of the customer profiles for Bea's Bookstore is a college student purchasing textbooks. Which of the following is a psychographic description of this typical customer: A. Works part-time or is unemployed B. Lives in a dorm or apartment C. Between the ages of 18-23 D. Eager to save money

D. Eager to save money

A hotel discovers that 60% of consumers prefer to book directly with a hotel versus via an online travel agency (OTA) listing with the same price. The hotel's research findings also indicate that 55% of consumers still prefer to book directly with a hotel when the hotel option is up to 20% higher than the price listed on an OTA site. Based on this information, which of the following business strategies should the hotel adopt to increase direct hotel bookings and maintain its profitability: A. Increase direct hotel room rates 30% to ensure the hotel is profitable B. Gather consumer opinions about the hotel's amenities to improve them C. Discontinue business relationships with OTAs to increase direct booking rates D. Gather consumer opinions about the hotel's booking process to improve it

D. Gather consumer opinions about the hotel's booking process to improve it

Which of the following is a true statement about giving recognition: A. It results in relatively low returns for the high cost. B. It decreases loyalty and harms relationships. C. It contributes to a competitive work environment. D. It increases morale among group members.

D. It increases morale among group members.

Why is it important for new businesses to use resources productively? A. It improves marketing efforts. B. Investors expect immediate returns. C. It builds brand loyalty. D. Resources are often limited.

D. Resources are often limited.

Which of the following techniques is the best example of leveraging existing business relationships: A. Deleting negative client reviews B. Avoiding meeting new people C. Calling clients just to say hello D. Sending holiday cards to clients

D. Sending holiday cards to clients

Before launching a new product, marketers should obtain the support of top company leadership. This is an example of which aspect of change management? A. Readiness B. Involvement C. Impact D. Sponsorship

D. Sponsorship

Which of the following statements regarding a company's board of directors is true: A. A company's board of directors represents the interests of company management. B. Individuals on the board of directors are elected by employees of the company. C. The board of directors has very little influence on a company's major decisions. D. The board of directors has the greatest influence on corporate governance.

D. The board of directors has the greatest influence on corporate governance.

Which part of a business plan can help define how a new venture will reach its customers? A. The product description B. The executive summary C. The competitive analysis D. The market analysis

D. The market analysis

Logan has a great idea for a new software program. However, for Logan's idea to be considered an entrepreneurial discovery, there must be A. a team of employees ready to create it. B. no existing competition. C. limited need for research. D. a market of customers willing to pay for it.

D. a market of customers willing to pay for it.

Ever since Marley received an undercooked burger from Quick n' Fresh Restaurant, she just can't bring herself to support the business again. She's concerned she'll get another undercooked sandwich—and she can't get rid of the negative feeling she gets when she sees the restaurant. Marley's distaste for Quick n' Fresh is an example of a(n) A. falsehood. B. belief. C. statement. D. attitude.

D. attitude.

Javon's coffee shop has finally started to make money, and he wants to invest in product innovation. Javon should A. advertise on social media. B. hire two new baristas. C. keep the café open an hour later. D. begin selling pastries and baked goods.

D. begin selling pastries and baked goods.

The makers of Bliss luxury bath soaps have chosen to sell their products through retail stores, online e- tailors, and direct-to-consumer through their website. In other words, Bliss has chosen its A. manufacturing model. B. business model. C. pyramid scheme. D. channels of distribution.

D. channels of distribution.

Business owners who finance their businesses with secured loans face the risk of losing A. owner capital withdrawals. B. full control of the business. C. access to cash flow. D. collateral offered.

D. collateral offered.

Risks that are associated with government regulations are classified as __________ risks. A. operational B. financial C. strategic D. compliance

D. compliance

When businesses take the time to study their competition, they can A. hurt their competitors' reputations. B. ensure that their competitors lose sales and go out of business. C. help their competition attract more customers. D. learn which customer service strategies work and which don't.

D. learn which customer service strategies work and which don't.

Widget Industries is a new company that is coming out with a new product. A similar product is in the market but has not yet caught on with most consumers. Widget Industries should price its product __________ than its competitors in an attempt to __________. A. higher; gain as much of the market as possible B. lower; create an exclusive image C. higher; create a discount image D. lower; gain as much of the market as possible

D. lower; gain as much of the market as possible

Using a locked mailbox, implementing a "last person out" policy, and numbering building keys are all examples of policies and procedures designed to A. determine which employees can and can't be trusted. B. prevent employees from stealing from the workplace. C. foster a positive workplace culture for employees. D. maintain the physical security of a workplace

D. maintain the physical security of a workplace

Every __________ is the result of a process. A. project B. activity C. input D. outcome

D. outcome

A company analyzing data from past holiday sales periods to make decisions concerning release dates for new products is using __________ analytics. A. descriptive B. big data C. prescriptive D. predictive

D. predictive

Ellie is opening her own daycare and hiring three teachers. She interviews Jeff as a potential candidate but chooses not to hire him. Ellie could be violating regulations if she chose not to hire Jeff because A. her friend Larissa is more qualified for the position. B. he is too experienced and overqualified for the position. C. she was not impressed by his grooming and appearance. D. she does not feel comfortable hiring a man as a teacher.

D. she does not feel comfortable hiring a man as a teacher.

One way to ensure that compliance is adequately implemented is to A. separate compliance by department. B. avoid changing the compliance strategy. C. discuss compliance with customers. D. train all employees on compliance strategy.

D. train all employees on compliance strategy.

What is an example of an amplified word-of-mouth strategy? A. A company asks customers to share product reviews on a website. B. Fans share the release date for a new product on Facebook. C. Customers post comments about a company on Twitter. D. A customer shares her opinion of a new product with a friend.

A. A company asks customers to share product reviews on a website.

When marketers face a new set of circumstances or run into obstacles, what is the best course of action? A. Adapt their marketing mix. B. Avoid the situation. C. Use their original marketing mix. D. Get rid of their marketing mix.

A. Adapt their marketing mix.

Which of the following activities would be most useful in building a corporate brand: A. Creating a logo and tagline to identify a company B. Advertising a new product in magazine ads C. Creating an online store to sell products D. Surveying customers to identify wants and needs

A. Creating a logo and tagline to identify a company

What type of insurance provides monetary payments to an independent business owner running a business from his/her home in the event that s/he develops a personal illness and is unable to work? A. Disability B. Worker's compensation C. Health D. Homeowner's

A. Disability

In which of the following situations are you most likely to pay excise taxes: A. Filling up your car with gasoline B. Purchasing a new condominium C. Ordering coffee from another country D. Inheriting money from your grandfather

A. Filling up your car with gasoline

Which of the following must occur for supply chain management to be successful: A. Goods and communication should flow both ways. B. Producers should be in contact with final customers. C. Emphasis should be placed on internal activities. D. Few people should be involved in operations.

A. Goods and communication should flow both ways.

Which of the following is an inexpensive source of information that entrepreneurs can use during concept development: A. Researching similar products B. Creating a product prototype C. Conducting an observational study D. Introducing the product to a test market

A. Researching similar products

What is an example of a company using a direct marketing channel? A. Responding to customer ideas and requests via email B. Hiring a research company to conduct marketing surveys C. Advertising products in a popular magazine D. Creating an ad that is promoted on social media

A. Responding to customer ideas and requests via email

Which of the following is a question that businesses can use cost-benefit analysis to help answer: A. Should our business expand to an overseas market? B. Who should star in our new promotional campaign? C. What should we name our business? D. What colors should our new product come in?

A. Should our business expand to an overseas market?

A car company has decided to invest less in its successful pickup truck and to use those funds instead on the development of its new hybrid vehicle. This is an example of A. a harvest strategy. B. a marketing plan. C. risk mitigation. D. the discovery process.

A. a harvest strategy.

An organization-wide system that businesses use to ensure that products meet quality standards is known as quality A. assurance. B. control. C. management. D. improvement.

A. assurance.

Well-executed corporate governance ensures that an organization is managed in a way that is A. beneficial for all stakeholders. B. most helpful for company leaders. C. detrimental for competitors. D. irrelevant to the public eye.

A. beneficial for all stakeholders.

Business analysis is essentially the process of helping companies A. change. B. form. C. grow. D. communicate.

A. change.

If a business's main goal in conducting research is to implement the marketing concept, it is most likely to attempt to identify A. customer wants and needs. B. effective advertising methods. C. appropriate product prices. D. sales lost to the competition.

A. customer wants and needs.

Haleigh attends a conference focused on the use of recyclable materials and renewable energy throughout the world. The conference gives her the idea to invent a shower mat that conserves water. This is an example of how A. global trends can be a source of new business ideas. B. new business ideas must solve a social or political issue. C. global trends often fade quickly and leave little impact. D. entrepreneurs struggle to find time to explore global trends.

A. global trends can be a source of new business ideas.

When Victoria received her first paycheck from her job at the grocery store, she was expecting to have earned $800—$10 hourly for 80 hours of work. However, she was surprised to find that she only received around $610. This discrepancy is most likely due to A. income tax. B. unethical payroll practices. C. self-employment tax. D. the rate of inflation.

A. income tax.

If a company's decision makers all require different information concerning sales transactions to make business decisions, the company relies on __________ accounting. A. managerial B. financial C. quality management D. cost

A. managerial

A good manager recognizes each employee's unique strengths and talents and gives employees work that suits their skills. This is because a strengths-based work culture leads to greater product/service A. quality. B. recognition. C. credibility. D. publicity.

A. quality.

Electrical hazards, slipping and tripping, and violence are all examples of potential __________ in the workplace. A. safety issues B. compromises C. non-negotiables D. success indicators

A. safety issues

An organization would use cost accounting to identify the efficient use of A. supplies and resources. B. business strategies. C. intellectual property. D. motivational techniques.

A. supplies and resources.

Because of coordinated efforts to deliver products on time and manage inventory levels, Carolina's Clothing Company has built up a loyal brand following. This is an example of how A. supply chain management can increase customer satisfaction. B. customer service efforts often have little impact on sales. C. value is added at each stage of the supply chain. D. quality customer service has an impact on cash flow.

A. supply chain management can increase customer satisfaction.

A department manager reviews her budget and finds that she spent much less on office supplies than the budget had estimated. She has discovered a(n) A. variance. B. revenue. C. mistake. D. expense.

A. variance.