Intro to Business Chapter 7 Review

True or False: Most entrepreneurs have little trouble finding adequate financing during their start-up year, because the small size of their new firms means that financial needs are minimal.

False

True or False: one advantage of opening a franchise rather than starting a business from scratch is that start-up costs tend to be lower

False

True or False: A Study for the Small Business Administration confirmed that entrepreneurs are typically overconfident regarding their own abilities.

True

A deep-seated sense that the individual is personally responsible for what happens in his or her life is known as... a)overconfidence b)an internal locus of control c)an unrealistic expectation d)a large ego

b

In 2012, the overall U.S. entrepreneurship rates reached their highest level in 15 years. The rate increase is partially driven by... a)lower interest rates for loans associated with new businesses b)unemployed workers looking to stay afloat as they seek new jobs c)teenagers interested in launching their own business one day d)the unethical behavior by large corporations

b

Which of the following is NOT a significant drawback of getting into business by entering into a franchise arrangement? a)A franchisee has less independence and flexibility than the owner of a business that is started form scratch b)franchising is generally considered to be the riskiest option for starting a business c)the initial cost of most well-known franchises can be quite expensive d)the owner must pay ongoing royalty to the franchisor

b

Which of the following is an actual competitive disadvantage for many small businesses? a)high overhead costs b)lack of business knowledge and expertise by the owners c)inability to take advantage of advances in technology d)inability to compete effectively in global markets

b

"______ investors" typically look for private companies that will grow at the rate of 30-40% per year a)value b)cyclical c) blue chip d)angel

d

A document prepared by entrepreneurs that is absolutely critical for obtaining outside funding is called... a)a loan application b)a mission statement c)the company bylaws d)a business plan

d

_____ are small segments within a market that can offer profit potential to entrepreneurs who know how to serve them. a)demographic segments b)focus groups c)market nodes d)market niches

d