Chapter 07: Concept Check Quiz

Which of the following is an appealing benefit that entrepreneurs enjoy? a. Minimal workload b. Fixed income c. Flexible schedule d. Minimal risk

c. Flexible schedule

Which of the following is a drawback of buying an established business? a. It takes time and money to build a new customer base. b. It lacks a developed organizational structure. c. It may entail inheriting the previous owner's mistakes. d. It is more challenging to get financing and credit.

c. It may entail inheriting the previous owner's mistakes.

Which of the following is an advantage of starting a business from scratch? a. The entrepreneur has access to an established customer base. b. The entrepreneur faces less pressure in terms of securing permits and hiring employees. c. The entrepreneur gets to build his or her own business concept and structure. d. The entrepreneur can secure funding easily.

c. The entrepreneur gets to build his or her own business concept and structure.

In the context of small businesses and the economy of a country, which of the following factors can bring down entrepreneurship rates? a. A lack of unemployment security b. Limited employment opportunities c. Minimal business regulation d. A high level of employment protection

d. A high level of employment protection

People who risk their time, money, and other resources to start and manage a business are known as _____. a. employees b. executives c. regulators d. entrepreneurs

d. entrepreneurs

Which of the following is a characteristic of successful entrepreneurs? a. Confidence b. Apathy c. Intolerance of failure d. Intolerance of uncertainty

a. Confidence

In the context of various launching options when starting a new business, which of the following statements is a drawback associated with buying a franchise? a. It has less opportunity for creativity. b. Its logistics can be challenging. c. It involves a lot of pressure. d. It lacks management expertise and consulting.

a. It has less opportunity for creativity.

In the context of funding options for small businesses, which of the following statements is true of crowdfunding? a. Its sites are used to funds nonprofits. b. It consists of money attained through personal resources. c. It is more preferred by large corporations than small businesses. d. Its sites provide guarantors in case a venture fails.

a. Its sites are used to funds nonprofits.

Entrepreneurs who mortgage their homes for the business and stake their reputation on the success of an unproven product demonstrate: a. a high tolerance of uncertainty. b. an external locus of control. c. a low tolerance of failure. d. low self-reliance.

a. a high tolerance of uncertainty.

Which of the following is a threat to small businesses? a. The unavailability of technology b. A bigger regulatory burden compared to large businesses c. Limited scope for providing effective customer service d. Higher overhead costs compared to large businesses

b. A bigger regulatory burden compared to large businesses

_____ are individuals who finance start-up companies with high growth potential in exchange for a share of ownership. a. Philanthropists b. Angel investors c. Crowdfunders d. Peer-to-peer lenders

b. Angel investors

_____ are small segments of a market with fewer competitors than the market as a whole. a. Market collectives b. Market niches c. Exhaustive markets d. Target markets

b. Market niches

Which of the following statements is true of small businesses? a. They tend to have higher overhead costs than large businesses. b. They have more scope to provide personal customer service than large businesses. c. They tend to avoid market niches because of the presence of more competitors. d. They have lower health insurance costs than large businesses.

b. They have more scope to provide personal customer service than large businesses.

According to the U.S. Small Business Administration (SBA), to officially count as a small business the: a. workforce should be more than 75% of the nation's employment. b. number of employees should range from fewer than 100 to 1,500. c. average revenue of the business should be less than $0.75 million. d. average revenue of the business should be more than $30 million.

b. number of employees should range from fewer than 100 to 1,500.

Which of the following is a reason why many members of the European Union have low entrepreneurship rates? a. They are yet to develop niche markets because their markets are far from the maturity phase. b. They do not have well-developed property rights, making it much riskier to form new businesses. c. They provide strong unemployment insurance to their citizens. d. They do not provide employment protection to their citizens.

c. They provide strong unemployment insurance to their citizens.

_____ are companies that invest in start-up businesses with high growth potential in exchange for a share of ownership. a. Nonprofit organizations b. Peer-to-peer lenders c. Venture capital firms d. Alternative lenders

c. Venture capital firms

Entrepreneurs must understand that no conventional lending source, whether private or government, will: a. associate with start-ups that do not have a recognized brand name. b. lend any money to start-ups. c. lend all of a start-up's funding. d. charge interest for start-ups that show high profit gains in its first quarter.

c. lend all of a start-up's funding.

When starting a business from scratch, _____. a. it is easy and quick to build a customer base b. it is easy to get credit from both lenders and suppliers c. the logistics can be challenging d. the chances of first-year failure are minimal

c. the logistics can be challenging

_____ is a characteristic that most successful entrepreneurs possess. a. Apathy b. External locus of control c. Intolerance of failure d. Energy

d. Energy

Which of the following is one of the largest crowdfunding sites in terms of traffic? a. Businessinsider.com b. Futurelearn.com c. Cesim.com d. Kickstarter.com

d. Kickstarter.com

Which of the following statements is true of people with an external locus of control? a. They validate their own efforts. b. They feel that they have complete control over their lives. c. They are extremely self-reliant. d. They believe that the actions of others can control their fate.

d. They believe that the actions of others can control their fate.