Chaper 7

3. Raoul is an illiterate who does not have proper skills for any job. As a result, he is unable to find permanent employment. As a last resort, Raoul starts a diner in his home to earn a regular income for his family. In the given scenario, Raoul most likely started the diner because it offered _____.

a chance of survival

20. Julian wants to open a bakery. He uses his savings and borrows some funds from his family to start his business. In the given scenario, Julian uses _____ to fund his business.

personal resources

18. Gemini Inc., a large conglomerate, offered Timothy's new logistics company the much required financial support in exchange for a 40% ownership in the company. It also provided Timothy with an experienced group of people to help him make crucial decisions for the company. In the given scenario, which of the following statements is true of Gemini Inc.?

It is a venture capital firm.

6. In the event that a large company has to downsize, the middle-aged workers who are laid off find it difficult to find new jobs. When such workers decide to start their own businesses, they:

are called necessity entrepreneurs

5. A__________is a formal document that describes a business concept, outlines core business objectives, and details strategies and timelines for achieving those objectives.

business plan

9. The primary reason people choose to become entrepreneurs is to:

earn more money

25. Lowell runs a unisex salon and has six 10-hour workdays. If a customer requests him to stay open on the seventh day, he always obliges. He also provides home services if requested. Which entrepreneurial characteristic is most likely highlighted in the given scenario?

energy

10. Rahul owns a guitar store that is famous for customizing guitars. From choosing the wood for the body to the type of pickups, everything can be selected by the customer. This feature attracts beginners and professionals alike to Rahul's store. The specific nature of the business makes it unique and results in fewer competitors. This allows Rahul to choose the prices for his services. The opportunity of _____ is highlighted in the given scenario.

exploiting market niches

24. Maude worked as a lead animator in an animation company. However, she could not exercise her freedom while working on projects because she was bound by the decisions made by the company. Fed up with this, Maude quit her job and started an independent animation firm where she accepts only those projects that allow her a free rein in terms of creativity. In the given scenario, Maude most likely started her own firm because it offered _____.

independence

11. In low-income countries, a high percentage of entrepreneurs are considered__________.

necessity entrepreneurs

4. Ruben owns an astronomy-themed restaurant. The entire restaurant resembles a planetarium. He has also installed a projector that transforms the ceiling into a night sky. Ruben used most of his savings to fund this venture and also borrowed funds from his friends and family. In the given scenario, Ruben used _____ to fund his business.

personal resources

19. Charles owns a restaurant that is thematically modeled into representing the pop culture of the 1980s. While setting up the restaurant, Charles took care of everything himself, from interior decoration to menu and music. He even got the permit for the restaurant himself. Which entrepreneurial characteristic is highlighted in the given scenario?

self-reliance

7. Timothy wanted to start a coffeehouse. However, he could not buy a space to start his business because of lack of funds. Which of the following threats is highlighted in the given scenario?

too little money

14. In the context of entrepreneurs, which of the following statements is a difference between an internal locus of control and an external locus of control?

• An internal locus of control involves personal responsibility, whereas an external locus of control does not.

16. In the context of various funding options for small businesses, which of the following statements is a difference between angel investors and venture capital firms?

• Angel investors are wealthy individuals, whereas venture capital firms are companies.

17. In the context of the U.S. economy, small businesses:

• Are often the first to contract when times are tough?

1. The nation of Rhodesia has the lowest entrepreneurship rate globally. A new government, headed by President Harold David Wengerd, aims to make the country's business environment more supportive toward burgeoning entrepreneurs. Which of the following measures should be taken to increase the entrepreneurship rate in Rhodesia?

• Eliminating complex regulations placed on businesses

8. According to small business experts, while raising start-up funds from friends and relatives, it is:

• Essential to keep the relationship as professional as possible.

21. People with an external locus of control:

• Feel buffeted by forces such as random luck.

2. Olivia runs a spa for women. She employs only two helpers and one receptionist. This enables her to focus most of her resources on procuring products required to provide comfort and high-quality services to customers. The opportunity of _____ is highlighted in the given scenario

• Having lower overhead costs

12. Howard is a young entrepreneur who is invested in creating a new form of social media. He is sure of his idea and believes that it will be successful in the long run. However, he is careful not to be overoptimistic about it and works on other ideas as well. In the given scenario, which of the following statements is true of Howard?

• He is confident but not overconfident regarding his abilities.

15. Bertha runs a fashion boutique. She prefers to personally interact with her customers to gauge the styles that would suit their personality. Her customers also prefer talking to her in person to share their preferences in colors, designs, styles, and fabric as they value her suggestions. The opportunity of _____ is highlighted in the given scenario.

• providing personal customer service

13. Priscilla is a trader of silver and diamond jewelry. Due to a recessionary trend in the industry, her business has not been making any profits for a few months. As the end of this economic trend cannot be easily ascertained, she decides to get her house mortgaged so that she can add a new line of business of trading in semi-precious stones. This financial risk appetite of Priscilla illustrates her _____ as an entrepreneur.

• tolerance of uncertainty