Chapter 1 Multiple Choice Questions

According to the Global Entrepreneurship Monitor (GEM) 2015-2016 survey, about ________ percent of adults in the United States are either starting a business or are running a business that has been in existence for less than 3 1/2 years.

11.9

According to a Bentley University survey, ________ percent of millennials have a desire to start their own business.

66

The Savvy Entrepreneurial Firm feature in Chapter 1 focuses on incubators and accelerators, those that help start-ups. ________ are organizations that offer a small amount of seed funding in exchange for small equity positions in the companies that participate in their programs.

Accelerators

Which of the following statements regarding survival rates of entrepreneurial firms in the United States is correct?

As high as 50 percent after four years

Suppose you are a Small Business Development Center counselor and you're looking at the personality profiles of five potential entrepreneurs. Based on the profiles, which individual has the most desirable mix of personal characteristics to become a successful entrepreneur?

Candidate A: visionary, energetic, moderate risk taker

Which of the following is the correct sequence for the four steps in the entrepreneurial process?

Deciding to become an entrepreneur, developing successful business ideas, moving from an idea to an entrepreneurial firm, managing the growing entrepreneurial firm

Which of the following is NOT one of the four steps of the entrepreneurial process?

Determining how to seize the spotlight

Which of the following is NOT one of the five common myths about entrepreneurs?

Entrepreneurs are tenacious.

Pacific Fishing LLC is a startup that is working on a new technology for the fishing industry. Because the technology it's working on is highly proprietary, the company is located in the warehouse district of a large western city. Pacific's founder, Ray Sims, rarely gives interviews and is careful to not divulge much about what the company is doing. Which of the following common myths about entrepreneurs does the behavior of its founder, Ray Sims, dispel?

Entrepreneurs love the spotlight.

Alex and Patty Webb launched a firm several years ago and have been particularly successful in introducing new products to the marketplace. One thing that Alex and Patty are particularly good at is translating their thoughts, creativity, and imaginations into products that reach the marketplace. The ability to make this happen is most closely related to which of the following characteristics of successful entrepreneurs?

Execution intelligence

The Partnering for Success feature in Chapter 1 focuses on campus ambassador or campus rep programs. According to the feature, which of the following is NOT a characteristic that such programs typically look for in student hires?

Have a wide network of friends

________ is the process of creating something new, which is central to the entrepreneurial process.

Innovation

In the book The Theory of Economic Development, ________ argued that entrepreneurs develop new products and technologies that, over time, make current products and technologies obsolete. This process is called creative destruction.

Joseph Schumpeter

Which of the following was NOT identified in the textbook as one of the common traits and characteristics of entrepreneurs?

Pessimistic disposition

Stacey Wills, who is at heart a craftsperson, recently started a firm to manufacture a new innovative food blender. Stacey's desire is to sell her food blender to as many people as possible because she firmly believes in the merits of her product. Stacey's story best illustrates which of the following characteristics, or attributes, of a successful entrepreneur?

Product/customer focus

Which of the following was NOT given in the textbook as a reason for the increase in the number of senior entrepreneurs?

Seniors tend to be more passionate about new business ideas than middle-aged or younger prospective entrepreneurs.

Which of the following is NOT a personality trait or characteristic common among entrepreneurs?

Short attention span

In regard to patent activity (issuance), which of the following statements is correct?

Small businesses outperform their larger counterparts.

Which of the following was NOT identified in the textbook as one of the five primary reasons passion is important for the launch of a successful entrepreneurial organization?

The ability to stick to a plan even when faced with evidence that changes are needed

Which of the following statements is correct regarding entrepreneurial activity and age ranges?

The highest percentage of entrepreneurs falls in the 45 to 54 age range.

Which of the following statements is incorrect regarding entrepreneurial activity and age range?

The majority of individuals who start companies are in their forties and fifties.

Which of the following statements is NOT true about women-owned businesses in the United States?

The number of women-owned businesses is decreasing.

Which of the following is an accurate characterization of interest in entrepreneurship?

There is tremendous interest in entrepreneurship across the world.

The What Went Wrong? feature in Chapter 1 focuses on Prim, a failed startup in the laundry industry. According to the feature, Prim failed largely as a result of ________.

a lack of passion and resolve

According to the textbook, entrepreneurship has historically had ________.

a major impact on both the economy and society

The number one characteristic shared by successful entrepreneurs is ________.

a passion for the business

There has been ________ in the number of minority entrepreneurs in the United States over the past several years.

a substantial increase

According to the textbook, the number one reason that people become entrepreneurs is to ________.

be their own boss

The three primary reasons that people become entrepreneurs and start their own firms are to ________.

be their own boss, pursue their own ideas, and pursue financial rewards

Entrepreneurial firms ________.

bring new products and services to market by creating and seizing opportunities

A firm's ________ is a plan for how it competes, uses its resources, structures its relationships, interfaces with customers, and creates value to sustain itself on the basis of the value it creates.

business model

A(n) ________ is a written document that describes all the aspects of a business venture in a concise manner.

business plan

Apple is an established firm that encourages and emphasizes entrepreneurial behavior throughout its various divisions. According to the textbook, Apple practices ________ entrepreneurship.

corporate

As new products that are better than the existing generation of products are introduced, sales normally increase because the new products provide consumers increased value or worth. This process, which is called ________, stimulates economic activity, which is a good thing for the economy.

creative destruction

According to the textbook, Dropbox, Facebook, and Uber are examples of ________ firms.

entrepreneurial

Google is a firm that is proactive, innovative and risk-taking. From this description, we can most accurately conclude that Google has a high level of ________.

entrepreneurial intensity

Montana Sky Trails leads multiday outdoor adventure trips for private groups and corporate clients to various locations across Montana. The company was started by Justin Smith, an individual that gave up a prestigious job in banking because Montana Sky Trails better accommodates his personal lifestyle. Montana Sky Trails is an example of a(n) ________ firm.

lifestyle

According to the textbook, there are three types of startup firms: ________.

lifestyle firms, salary-substitute firms, and entrepreneurial firms

According to the textbook, entrepreneurs are ________.

moderate risk takers

Kasey Stevenson is starting a firm in the women's clothing industry primarily to pursue financial rewards. According to the textbook, starting a business to make a lot of money ________.

often fails to live up to its hype

According to the textbook, the four characteristics of successful entrepreneurs are ________.

passion for the business, tenacity despite failure, product/customer focus, and execution intelligence

According to the textbook, the passion that motivates people to launch entrepreneurial firms typically stems from the entrepreneur's belief that the business will ________.

positively influence people's lives

Cody Rodgers is the founder of a company named Extreme Sports Apparel. The company makes apparel products for extreme sports enthusiasts such as rock climbers, triathletes, skateboarders, and BMX bikers. Cody wants his company to pursue a high level of corporate entrepreneurship. To achieve that goal, Cody's firm should be ________.

proactive, innovative, and risktaking

One of the businesses owned by Kirsten Blowers, the entrepreneur profiled in the opening feature of Chapter 1, is Riffraff. Riffraff sells ________.

refurbished furniture

Colorado Sandwich, Soup and Salad is a casual dining restaurant that has been owned by Stephanie Peterson for the past 14 years. The restaurant offers a menu that is typical for casual dining restaurants and affords Stephanie a level of income that is similar to what she would earn in a conventional job. According to the textbook, Colorado Sandwich, Soup and Salad is an example of a(n) ________ firm.

salary-substitute

According to Chapter 1, investors often cite the ________ as their most important criterion in the decision to fund new ventures.

strength of the entrepreneur

According to Chapter 1, a sentiment that venture capitalists often express is that ________.

they would rather fund a strong entrepreneur with a mediocre business idea than fund a strong business idea with a mediocre entrepreneur

According to the Global Entrepreneurship Monitor (GEM) 2015-2016 study, the majority of people in high-income countries are drawn to entrepreneurship ________.

to take advantage of an attractive opportunity

An event that prompts an individual to become an entrepreneur, such as losing a job, inheriting money, or accommodating a certain lifestyle, is referred to as a(n) ________.

triggering event

Jan Berry recently received a $500,000 inheritance from her maternal grandmother. Jan decided to use the money to start a business. According to the textbook, the inheritance that Jan received was the ________ that prompted her to start a business.

triggering event