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.