Entrepreneurship Chapter 1

voluntary

A transaction between two parties who willingly agree to trade money for a product or service is referred to as​ _____ exchange.

mentor

A trusted advisor with whom a person forms a developmental partnership through which​ information, insight,​ skills, and knowledge are shared to promote personal​ and/or professional growth is known as a​ ______.

add value to scare resources

According to French economist​ Jean-Baptiste Say, entrepreneurs​ ________.

​Listen; Observe; Analyze

According to the​ text, which of the following is the accurate description of how entrepreneurs create a business​ idea?

a commission

An entrepreneur who receives a percentage of the value of a sale is being paid​ ______.

​cost/benefit analysis

A​ ____ is a​ decision-making process in which the costs of taking an action are compared to the benefits.

microenterprise

A​ _____ is defined as a business with five or fewer​ employees, initial capitalization requirements of less than​ $50,000, and habitual operational involvement of the owner.

focus strategy differentiation

Big Sound Stereo produces​ high-end noise cancelling headphones. The company prides itself on the sound quality its product provides over other products on the market and feels that this feature and other premium features justify a high price. Big Sound Stereo typically advertises its product in magazines and newspapers that cater to wealthy consumers. Which of Michael​ Porter's strategies is Big Sound Stereo​ using?

has a goal of attaining beneficial returns for society

In addition to achieving​ profitability, social entrepreneurship​ _______.

individuals and companies may compete for their own economic gains

In a​ free-market system,​ ____.

Carrying on a family business tradition

Joseph Schumpeter described five basic ways that entrepreneurs can find opportunities to create new​ business? Which of the following is NOT included in​ Schumpeter's definition?

innovation is the key to entrepreneurship

Joseph Schumpeter expanded​ Say's definition of entrepreneurship by suggesting that​ _____.

capital

Money or property owned or used in business is called​ _____.

should exploit changes in the world

Peter Drucker argued that for a business to be considered entrepreneurial it​ ___.

fewer than​ 500, less than​ $5 million

The U.S. Small Business Association defines a small business as having​ ____ employees and selling​ ______ worth of products or services annually.

a​ trade-off

The act of giving up one thing for another is called​ _____.

profit

The amount of earnings remaining after all costs are deducted from the income of a business is called​ ______.

opportunity cost

The value of what must be given up in order to obtain something else is called​ ______.

profit

What is the sign that the entrepreneur has added value to the resources he or she is​ using?

about​ 99.9%

What percentage of the 27.3 million businesses in the United States are small companies with less than 500​ employees?

Salary

What type of payment system is described in the text as a fixed payment made at regular​ intervals, such as every week or every​ month?

Dependency

Which of the following is NOT a potential benefit of​ entrepreneurship?

financial security

Which of the following is NOT one of the numerous potential costs that entrepreneurs​ face?

Avoid the use of teams.

Which of the following is NOT one of the seven basic rules of building a successful business that Def Jam founders Russell Simmons and Rick Rubin​ followed?

Implementation of new organizational designs

Which of the following is NOT one of the​ "five roots of​ opportunity"?

greater efficiency

Which of the following is a benefit of free​ enterprise?

An opportunity has a unique characteristic that distinguishes it from an ordinary idea.

Which of the following statements is correct regarding ideas and​ opportunities?

Green entrepreneurship

Which term BEST describes business activities that avoid harm to the environment or help to protect it in some​ way?

gazelle

Which type of company achieves an annual growth rate of 20 percent or​ greater, typically measured by the increase in sales​ revenue?

mainstream small firm

Which type of firm is typically established with continuity and permanent wealth building in mind and is more often registered with​ local, state, and federal​ agencies?

Venture philanthropy

Which type of social entrepreneurship invests directly in business enterprises with the goal of encouraging entrepreneurial approaches to achieve social impact rather than monetary​ returns?

entrepreneur

​A(n) _________ is someone who recognizes an opportunity to start a business that other people may not have noticed and acts on it.

Entrepreneurs

​_______ are individuals who recognize opportunities and organize and manage a​ business, assuming the risk for the sake of potential return.