STS 2830 CH_1_2_3_4
52. A loner, often socially isolated, a hard worker, a fast learner, and a risk taker seeking wealth represents the profile of a(n) A. idea person. B. classic entrepreneur. C. managerial entrepreneur. D. small business owner.
B. classic entrepreneur.
76. B&B Music can be described as a(n) A. minority business. B. entrepreneurial team. C. second-career entrepreneurship. D. expert business.
B. entrepreneurial team.
10. The key market knowledge for a small business A. is to know how to seek and obtain external financing. B. focuses on its immediate marketplace and communities. C. is to know how to cash out through the sale of an initial public offering of stock or through the sale of the company to a larger company. D. focuses on the need to know how to dominate the market and grow dramatically and quickly.
B. focuses on its immediate marketplace and communities.
80. 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.
89. "S" in the creativity tool SCAMPER stands for A. strategize. B. substitute. C. submit. D. solicit.
B. substitute.
96. _____ 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
40. _____ refers to certification for having met a standard of quality that is consistently evaluated around the world. A. ANSI B. Six Sigma C. ISO D. TQM
C. ISO
_____ 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
81. 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
51. Which of the following is a three-step process that helps people make better and more ethical decisions? A. First principles B. Golden rules C. Ethical decision-making D. Mutuality development process
C. Ethical decision-making
67. Which of the following entrepreneurs employ about 58 percent of America's total workforce? A. Women entrepreneurs B. Second career entrepreneurs C. Family business owners D. Minority entrepreneurs
C. Family business owners
70. The two fastest growing minority groups represent the largest segments of minority business owners. These are A. Hispanics and Asians. B. Hispanics and Africans. C. Asians and Africans. D. Asians and Pacific Islanders.
A. Hispanics and Asians.
"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?
2. Identify the two hurdles that people need to overcome to move from thinking about owning their own business to achieving it. A. Moving from inaction to action and taking the right action. B. Financing the business and government regulation. C. Experience from large corporations for needed skill sets and organization abilities. D. Family support and finding the right people for the organization.
A. Moving from inaction to action and taking the right action.
41. Which of the following is a product-based legitimacy indicator? A. Organization size B. Testimonials C. Business network membership D. Internet identity
B. Testimonials
98. 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
23. The BRIE model can help an individual deal with one of the biggest hurdles in starting a business, which is A. getting resources. B. being inactive. C. setting boundaries. D. making an exchange.
B. being inactive.
20. Funding invested for a share of a firm or given as loans or credit from family, friends, and other businesses used to help start or grow a firm is known as A. committed capital. B. informal capital. C. mezzanine capital. D. formal social capital.
B. informal capital.
37. The two ways to build social capital are through A. consistency and visibility. B. legitimacy and social networking. C. culture and personal ethics. D. individuals and teams.
B. legitimacy and social networking.
79. 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 (P.81) D. Work experience
C. A similar business (P.81)
26. Which aspect of entrepreneurship refers to being in-tune with one's market? A. Efficiency B. Creation C. Customer-focus D. Growth
C. Customer-focus
12. Identify the characteristic of a high-tech venture. A. Owner's own money is the preferred funding source B. Focus is on efficiency C. Delegation is essential D. Sales are more important than marketing
C. Delegation is essential
24. According to the latest statistics, small businesses have created _____ percent of the new jobs. A. 75 B. 25 C. 50 D. 95
A. 75
60. The energy and focus needed to bring a business into existence relates to which of the following competencies? A. Determination B. Resource C. Opportunity D. Basic business
A. Determination
64. . _____ entrepreneurs are owners for a lifetime, sometimes in one business, and sometimes across several firms. A. Habitual B. Harvest C. Growth D. Spiral
A. Habitual
74. Bart appears to express an interest in which of the following careers? A. Habitual B. Harvest C. Spiral D. Occasional
A. Habitual
28. Scenario: Jamie Johnson and "For Kidz" Taking classes at a local university, Jamie heard a consistent theme from many professors, students, and parents in the community: "There is nothing for children in this rural area." Jamie always liked children and thought of starting a business "For Kidz" targeting children 12 and under. 29. Where can Jamie go to get some help with his business idea? A. Small Business Development Center B. U.S. Department of Commerce office C. Incubator D. Small Business Administration Center
A. Small Business Development Center
44. An entrepreneur's relationships and contacts with others is termed as A. a social network. B. visibility. C. the Golden Rule. D. mutuality.
A. a social network.
25. Mandarin is a restaurant which has opened recently. People from all over town flock to Mandarin to find out how good it is. This gives a big boost to the restaurant's initial business. But it causes the other restaurants in the area to lose business temporarily. The way in which Mandarin hurts existing restaurants is an example of A. creative destruction. B. efficiency. C. innovative disruption. D. market penetration.
A. creative destruction.
18. The ability of business owners to structure life in the way that suits their needs best refers to A. flexibility rewards. B. family rewards. C. growth rewards. D. wealth rewards.
A. flexibility rewards.
1. According to the text, small business involves _____ people and has its owner managing the business on a day-to-day basis. A. 100-200 B. 1-50 C. between 200 to 500 D. at least 500
B. 1-50
91. 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
_____ 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
84. 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.
31. In order to start "For Kidz" successfully, Jamie needs all of the following elements to come together EXCEPT A. boundary. B. recruitment. C. intention. D. exchange.
B. recruitment.
35. Which of the following is an example of the general environment? A. The government B. The board of directors C. The economic sector D. Unions
C. The economic sector
73. Being a contemporary classic entrepreneur, Brad would exhibit all of the following traits EXCEPT being A. a hard worker. B. socially isolated. C. an average income seeker. D. a fast learner.
C. an average income seeker.
4. A facility which offers subsidized space and business advice to companies in their earliest stages of operation is called a(n) A. small business administration center. B. franchise. C. small business development center. D. incubator.
D. incubator. (p.5)
33. The _____ of a firm consists of those people inside the boundary—the owner, any employees, and any other owners or board members of the firm. A. macroenvironment B. external environment C. operating environment D. internal environment
D. internal environment
58. There are certain fundamental activities that all businesses must perform, which are called A. engineering business functions. B. basic business functions. C. business accreditations. D. key business functions.
D. key business functions.
83. 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
68. Two challenges typical to family businesses are A. motivation and nepotism. B. leadership and finances. C. succession and access. D. role conflict and succession.
D. role conflict and succession.
50. Green retailing is A. is at the core of exchange in the BRIE model. B. another term for sustainable entrepreneurship taken from the belief that green is the color of a healthy environment. C. minimizing waste and environmental degradation. D. selling products that have a better environmental footprint.
D. selling products that have a better environmental footprint.
69. _____ refers to the process of intergenerational transfer of business. A. Role conflict B. Succession C. Leadership D. Access
B. Succession
94. 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
6. The U.S. government agency that helps people start business is the A. Small Business Administration. B. U.S. Department of Business Development. C. Department of Business Development. D. U.S. Entrepreneurial Administration.
A. Small Business Administration.
Scenario: B&B Music Bart Barker has always had the talent for playing several musical instruments and has a fabulous voice. Bart has been playing music at family and friends' events for several years. At age 21, Bart is determined to open his own business with his brother Brad who is a business major. Bart is the idea person, whereas Brad is more the contemporary classic entrepreneur. Bart wants to start and own the business as a lifetime venture, whereas Brad already has an exit plan for their business. Despite these differences, the two brothers launch their business B&B Music Inc., with great fanfare. 72. Being an idea person, Bart would not be driven by A. great wealth. B. hard work. C. fame. D. fast learning.
A. great wealth.
32. Following the BRIE model in starting a business, the entrepreneur creates a boundary within the environment, setting his firm apart from the rest of the environment. In doing this, the entrepreneur gives the firm a(n) A. identity. B. bootstrap. C. organizational culture. D. network.
A. identity.
27. Social entrepreneurship A. involves creating new charitable and civic organizations which are financially self-sufficient. B. involves bringing new products or services to market. C. involves a person or group who owns their own for-profit business. D. involves revitalizing government agencies.
A. involves creating new charitable and civic organizations which are financially self-sufficient.
7. Truly entrepreneurial businesses are characterized by _____, in their products, services, or business models. A. novelty B. imitation C. experience D. government subsidy
A. novelty
77. 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
39. The three general forms of legitimacy that you can develop are based on A. products, people, and organization. B. individuals, teams, and industry views. C. universalism, utilitarianism, and the Golden Rule. D. integration, distribution, and universalism.
A. products, people, and organization.
53. Like classic entrepreneurs, small business owners are all of the following EXCEPT A. risk takers. B. socially isolated. C. often alone. D. hard workers.
A. risk takers.
34. Those parts of the environment that directly and consistently touch on the firm are called the A. task environment. B. internal environment. C. macroenvironment. D. general environment.
A. task environment.
71. Which of the following statements about certification for women- and minority-owned small businesses is false? A. Certification consists of an examination based acknowledgement that the firm is owned and operated as specified. B. Certification is for every women- or minority-owned small business. C. For those businesses that qualify, certification provides a ready means of access to opportunity and to networks of businesses and government agencies. D. For corporations, certification is handled by organizations that are not affiliated with the government or big business, such as the National Minority Supply and Diversity Council.
B. Certification is for every women- or minority-owned small business.
11. Which of the following is a characteristic of a small business? A. Preferred funding source is other people's money B. Focus is on efficiency C. Approach to human resource is to professionalize D. Delegation is essential
B. Focus is on efficiency
75. Brad appears to be leaning toward which of the following careers? A. Habitual B. Harvest C. Spiral D. Occasional
B. Harvest
65. Which of the following are owners with an exit plan? A. Growth entrepreneurs B. Harvest entrepreneurs C. Occasional entrepreneurs D. Habitual entrepreneurs
B. Harvest entrepreneurs
_____ entrepreneurs are people who generally have another job that is their primary one. A. Harvest B. Occasional C. Helical D. Spiral
B. Occasional
95. 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
87. 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?
38. _____ means that a firm is worthy of consideration or doing business with because of the impressions or opinions of customers, suppliers, investors, or competitors. A. Visibility B. Flexibility C. Legitimacy D. Modeling
C. Legitimacy
55. Which of the following personality types is often very risk-averse, preferring to build wealth through careful planning and action? A. Idea person B. Small business owner C. Managerial entrepreneur D. Classic entrepreneur
C. Managerial entrepreneur
13. Which of the following refers to the eventual size of the market, which can range from a small, local, or niche market to something used by millions or even billions? A. Innovativeness B. Mindshare C. Potential for growth D. Occupational structure
C. Potential for growth
21. According to Sageworks, in 2008, amid a recession, which of the following represented the most profitable industries for small businesses? A. Manufacturing industries B. Financial services C. Service industries D. Software industries
C. Service industries
43. Which of the following legal forms of organization-based legitimacy indicators would be the least legitimate? A. Corporation B. LLC C. Sole proprietorship D. Partnership
C. Sole proprietorship
49. _____ is an approach to operating a firm or a line of business which identifies, creates and exploits opportunities to make a profit in a way that can minimize the depletion of natural resources, maximize the use of a recycled material, or improve the environment. A. Business entrepreneurship B. Economic entrepreneurship C. Sustainable entrepreneurship D. Intrapreneurship
C. Sustainable entrepreneurship
46. Which of the following is NOT a key to success in electronic networking? A. Making it easy for people to contact you B. Taking initiative to ask others on the network to link with you C. Taking time to develop networks D. Finding and linking up with network mavens
C. Taking time to develop networks
97. 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.
16. The resource constrained sector A. are firms that have low to moderate levels of innovation and growth. B. are high growth and high innovation firms. C. are firms that have lots of innovative ideas but lack the funds to bring them to market. D. are generally not very innovative, but are designed for high levels of growth.
C. are firms that have lots of innovative ideas but lack the funds to bring them to market.
100. 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.
8. A prepackaged business bought, rented, or leased from a company is called a(n) A. incubator. B. imitative firm. C. franchise. D. novelty.
C. franchise.
54. Idea people are not particularly driven by _____, but they are driven by _____. A. greatness; great wealth B. hard work; risk taking C. great wealth; having their idea achieve greatness D. fame; socialization
C. great wealth; having their idea achieve greatness
42. Having trademarks, service marks, patents, or copyrights are product-based legitimacy indicators of A. certifications. B. customer service. C. intellectual property. D. quality standards.
C. intellectual property.
36. All of the following are true of social capital EXCEPT A. it includes characteristics like trust, consistency, and networks. B. it can be accumulated or spent. C. it is not associated with the concept of "goodwill." D. it is capital in the same sense that cash or land can be.
C. it is not associated with the concept of "goodwill."
9. People starting high-growth ventures A. require key market knowledge that focuses on their immediate marketplace and communities. B. focus on how to start small, with resources from the owner, family, and friends. C. need to know how to seek and obtain external financing. D. require a key type of knowledge of how to grow on the schedule set by and for the purposes of the owner.
C. need to know how to seek and obtain external financing.
92. 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 innovation
59. The ability or skill of the entrepreneur at finding expendable components necessary to the operation of the business such as time, information, location, financing, raw materials, and expertise is called A. basic business competencies. B. opportunity competencies. C. resource competencies. D. determination competencies.
C. resource competencies.
3. According to the Small Business Administration, about _____ of new firms with employees survive four years, and for owner-only firms this rate is _____ percent surviving four years. A. one-fourth; 30 B. one-half; 75 C. two-thirds; 50 D. two-fifths; 60
C. two-thirds; 50
5. What percent of firms getting help in incubators were still going at four years? A. 50 B. 81 C. 66 D. 87
D. 87
47. When faced with a crisis, what is the first step that a small business owner should follow? A. Get to the scene as soon as possible B. Communicate facts you know C. Appoint one person as the spokesperson D. Admit you are in trouble
D. Admit you are in trouble
45. According to the text, what is the most important part of social networking that would make a difference in how you would conduct business every day? A. Asking for help when you need it B. Respecting the other person's time C. Respecting the other person's expertise D. Being willing to reciprocate if asked
D. Being willing to reciprocate if asked
14. Identify the most numerous and widely available type of firm, ranging from low to moderate levels of innovation and growth. A. Resource constrained sector B. Ambitious firm sector C. Glamorous sector D. Economic core sector
D. Economic core sector
17. _____ rewards are what people get from facing and beating or learning from challenges. A. Recognition B. Flexibility C. Income D. Growth
D. Growth
57. Identify the trait which all entrepreneurial personality types have in common. A. Loneliness B. Social isolation C. Risk taking D. Hard work
D. Hard work
61. Which of the following relates to the skills necessary to identify and exploit elements of the business environment that can lead to profitable and sustainable business? A. Determination competencies B. Basic business competencies C. Resource competencies D. Opportunity competencies
D. Opportunity competencies
19. Which of the following is NOT a myth about small businesses? A. There is not enough financing to start businesses. B. You need to make something if you are going to make money. C. You can never try again if you fail once. D. There is no flexibility when you own your own business.
D. There is no flexibility when you own your own business.
15. Why are small businesses considered the economic core of society? A. They are high growth and high innovation firms. B. They are made up of franchises and multisite firms, who are generally not very innovative, but are designed for high levels of growth. C. They have lots of innovative ideas but lack the funds to bring them to market. D. They are the most numerous and most widely available type of firms.
D. They are the most numerous and most widely available type of firms.
88. 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?
82. 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
99. 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
48. According to the gold standard for crisis leadership, all of the following are steps to follow in a crisis EXCEPT A. show caring and accountability. B. have one person serve as the firm's spokesperson. C. deal with the crisis quickly. D. desegregate crisis management with the everyday management of the firm.
D. desegregate crisis management with the everyday management of the firm.
78. 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.
22. According to the BRIE model, in order to start a business, you need all of these elements to come together EXCEPT A. boundary. B. resources. C. intention. D. experience.
D. experience.
63. According to the text, there are three levels of professionalization. These are A. low, medium, and high. B. company, industry, and global. C. personal, team, and organizational. D. expert, specialized, and minimalized.
D. expert, specialized, and minimalized.
62. For those businesses that do get started, the amount of _____ is what distinguishes the more successful from the less successful firms. A. effort B. opportunities C. subordination D. expertise
D. expertise
30. If Jamie gets "For Kidz" up and running, he could be described as all of the following EXCEPT A. founder. B. owner-manager. C. independent small business. D. franchisor.
D. franchisor.
93. 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."
56. All of the following observations are true of the salesperson type of entrepreneur EXCEPT A. they work hard. B. they are very socially driven. C. they use their networks to minimize risk. D. they are most concerned with their wealth.
D. they are most concerned with their wealth.
