Chapter 5 Quiz

Which of the following is an example of a business in the service industry?

A car rental agency

Which of the following is false about control systems?

Control systems are not needed to keep a business on track.

Which of the following is required to help alert entrepreneurs to potential trouble?

Effective control systems

Which of the following is true of SBA financial programs?

Eligible firms must be unable to get private financing at reasonable terms.

Which of the following statements is true of new businesses?

Insufficient capital can contribute to new business failure.

Which of the following is an advantage of a franchise?

It lets franchisers grow by using the investment money provided by franchisees.

Which of the following statements on job creation is true?

Large companies are the last to lay off workers during economic downswings.

Which of the following statements on small businesses is true?

Small businesses sell consumers most of the products made by big manufacturers.

Which of the following is true of innovation?

Small businesses supply over half of all innovations in the U.S. marketplace each year.

Which of the following is true of small businesses?

Small firms specializing in international business create many new jobs.

Which of the following is true of most successful entrepreneurs?

They carefully analyze market conditions.

Which of the following is true of entrepreneurs?

They take a personal stake in the success or failure of the business.

A niche market is:

a segment of a market that is not currently being exploited.

Miriam pools all her savings to open a bakery that specializes in wedding cakes. She bakes the cakes, runs the store, and creates a website that allows customers to place orders online. Miriam is a(n) _____.

entrepreneur

A small business:

is owned by one individual or a small group.

Due to the strong economies of scale, small businesses generally do not do as well as large businesses in the _____ segment.

manufacturing

Steven is a polymer scientist with the motivation and expertise needed to start his own business. If he chooses to finance his business in the same way that most new businesspeople finance theirs, he will:

rely on personal resources.

A retail business:

sells products manufactured by other firms

A two-person software development company with annual sales of $100,000 would be considered a:

small business

Small-business investment companies (SBICs):

take a more balanced approach in their choices than venture capital companies.