Chapter 4

10. "Why might a cell phone that can play music MP3s be a better approach than a dedicated MP3 player?" pertains to which of the following questions? A. Is your product or idea innovative? B. Why will customers buy your product? C. Is your underlying technology unique? D. Who are the people behind the idea?

A. is your product or idea innovative?

18. You assume, as the business owner, that you need to do all the work, make all the sales calls, and solve everybody's problems. This refers to which major pitfall that business owners can become victim to when trying to become more innovative? A. Obeying rules that do not exist B. Judging ideas too quickly C. Identifying the wrong problem D. Getting the "bandits on the train."

A. obeying rules that do not exist

13. "S" in the creativity tool SCAMPER stands for A. strategize. B. substitute. C. submit. D. solicit.

B. substitute

9. _____ is a payment to a licensor based on the number or value of licensed items sold. A. Milestone payment B. Lump sum payment C. Royalty D. An exclusive right

C. royalty

2. If an owner of a fast-food restaurant notices that customers are asking for substitutions of healthier ingredients to food items, she may be motivated to contact her suppliers to ask about getting new ingredients, changing the menu, and increasing the healthy offerings on the menu to keep customers satisfied. This is an example of A. creativity. B. technology transfer. C. innovation. D. entrepreneurial alertness.

D. entrepreneurial alertness

1. Researchers in the field of entrepreneurship and small business believe that _____ behavior is the most basic and important entrepreneurial behavior. A. opportunity recognition B. idea networking C. observational D. question-seeking

A. opportunity recognition

19. This model has the entrepreneur assess whether the situation faced is one that is the same as it has been traditionally or if it is changing. A. Business process modeling B. Opportunity identification process C. Pilot test D. Radical innovation strategy

B. Opportunity identification process

15. Which popular innovation strategy can be just as effective and much more likely in the real world, than business opportunities that result from radical innovations? A. Magnifying B. Adapting C. Eliminating D. Rearranging

B. adapting

14. . _____ is a process of producing an idea or opportunity that is novel and useful, frequently delivered from making connections among distinct ideas or opportunities. A. Ethics B. Creativity C. Imitation D. Flexibility

B. creativity

4. According to the text, all of the following factors lead business owners to their business ideas EXCEPT A. work experience. B. government regulation. C. serendipity. D. family and friends.

B. government regulation

8. The firm that obtains the rights to use a particular piece of intellectual property is the A. licensor. B. licensee. C. obligor. D. assignor.

B. licensee

22. The industry and market component of the feasibility study should include which of the following components? A. Sales revenue forecast B. The competition C. Writing a business plan D. Pricing

B. the competition

20. _____ means the extent to which the idea is viable and realistic, and the extent to which you are aware of internal and external forces that could affect your business. A. Flexibility B. Consistency C. Feasibility D. Innovation

C. Feasibility

24. The measure of the number of visitors to your Web site who have actually made a purchase from you is known as A. eyeball rate. B. frame rate. C. conversion rate. D. pilot testing.

C. conversion rate

11. This question looks at the specific individuals, groups, or organizations you would approach first to buy your product or service. A. Who are the people behind the idea? B. Describe how you create value for your customers. C. How would you define the best initial set of customers? D. What marketplace need does your product address better than any other option?

C. How would you define the best initial set of customers?

3. You might see a business in an area that intrigues you because you learn that there is a growing market for this business and you think of a way to expand on the opportunity. Which of the following factors is considered the business idea behind this? A. Serendipity B. Personal interest C. A similar business D. Work experience

C. a similar business

5. Many owners of consulting companies took their own skills and launched businesses by selling those skills to other companies who needed them. This is an example of which of the following factors leading to business ideas? A. Family and friends B. Serendipity C. Education and expertise D. Personal interest

C. education and expertise

16. Rejecting existing ideas, and presenting a way to do things differently refers to _____ strategy. A. imitative B. cost leadership C. radical innovation D. integration

C. radical innvoation

21. What is the goal of a feasibility study? A. To create additional value for customers through great products or services. B. To get useful ideas out of creative employees that affect the business's bottom line. C. To assess if an idea can be profitably brought to market. D. To assess how well a preliminary run of a business works and what problems it might have.

C. to assess if an idea can be profitably brought to market

12. Which of the following looks like the simplest question but is actually the hardest one? A. Is your underlying technology unique? B. Who will buy your product? C. What is your product or idea? D. What is the market and its size?

D. What is the market and its size?

23. The future action plan component of the feasibility study includes which of the following elements? A. Profitability B. The competition C. Legal restrictions and rights D. Writing a business plan

D. Writing a business plan

17. All of the following are major pitfalls that business owners can become victims of when trying to become more innovative EXCEPT A. judging ideas too quickly. B. stopping with the first good idea. C. obeying rules that do not exist. D. getting the "bandits on the train."

D. getting the "bandits on the train"

7. A _____ is a legal agreement granting you rights to use a particular piece of intellectual property. A. caveat emptor B. franchise C. set-aside D. license

D. license

6. According to the entrepreneurs studied in PSED, which of the following factors was the most frequently mentioned source that led to their business idea? A. Discussion with potential investors B. Education and expertise C. Family and friends D. Work experience

D. work experience