ENTR321 Midterm

Feasibility analyses includes technical, market, financial organizational, and competitive analyses. (T/F)

True

Generally, the larger and more successful the franchisor, the greater the franchise fee that is charged. (T/F)

True

One reason that corporate entrepreneurship's become popular is because it allows corporations to tap the innovative talents of the personnel. (T/F)

True

The entrepreneurial spirit is not unique to America and Western Europe. It can be found in nearly every part of the world. (T/F)

True

Which of the following terms refers to the systematic evolution of a product or service into newer or larger markets? a) strategic management b) radical innovation c) incremental innovation d) collective entrepreneurship

c) incremental innovation

Firms do not need to alter management techniques to encourage corporate entrepreneurship since it tends to occur naturally. (T/F)

False

Timing has little to do with the success or failure of a new venture. (T/F)

False

In assessing a potential start-up opportunity, product/market problems include which of the following? a) venture capital relationship problems b) unclear business definition c) concept of a team approach d) assuming debt too early

b) unclear business definition

Which of the following best illustrates the power of positive externalities? a) Smart phones and other mobile devices have combined with social media applications to create a multitude of new ways for people to communicate. Traffic accidents due to inattentive driving have risen dramatically and continue to increase b) When organic waste (like paper & food) decomposes in a landfill, it produces methane gas. Many landfills now capture the gas and burn it to generate electricity. c) Increased production of natural gas has led to more pipelines and the compressor stations required every 50-70 miles to keep the gas moving. Noise pollution from the compressor stations has impacted property values in some rural areas d) Increasing use of mobile devices by parents as "digital babysitters" has created a need for programs in schools to develop children's emotional intelligence

b) When organic waste (like paper & food) decomposes in a landfill, it produces methane gas. Many landfills now capture the gas and burn it to generate electricity.

Entrepreneurs sense potential in business problems by asking a) who is to blame to failures? b) what about profits? c) what if and why not? d) farfetched, unimaginative questions

c) what if and why not?

Key resources and key activities (or processes) are two components of a venture's a) revenue streams b) customer value proposition c) stakeholder benefits d) business model

d) business model

In negotiating a deal to purchase an existing business, it is a bad idea to ask the seller to retain a minority interest in the firm. (T/F)

False

The word entrepreneur is derived from the French entreprendre, which is translated as "to assume the risk". (T/F)

False (it translates as "to undertake, to start)

Incubation in the creative process often occurs when the individual is doing something completely unrelated to the subject. (T/F)

True

Pricing becomes less of a concern when customers become aware of a product's unique characteristics that are superior to the competition. (T/F)

True

Which of the following is something that is similar between Angel Investors and Venture Capitalists? a) The stage of venture development when they are willing to invest b) Expected rate of return on their investment c) The amount of money they are willing to invest in a venture d) The analysis and "due diligence" process they use to evaluate a potential investment

b) Expected rate of return on their investment

The process approach to entrepreneurship seeks to a) explain why and how an individual chooses to pursue an opportunity b) explain the process of obtaining patents c) explain intrapreneurship d) explain the process of obtaining venture capital

a) explain why and how an individual chooses to pursue an opportunity

The opportunity for entrepreneurial innovation emerges from the intersection of a) unmet needs, potential solutions, and entrepreneurial cognition b) invention, extension, and duplication c) knowledge, perseverance, and luck d) market demand, financial capital, and human capital

a) unmet needs, potential solutions, and entrepreneurial cognition

When accounts receivable are bought from a company for capital funding it is called a) factoring b) trade credit c) financing d) leasing

a) factoring

Some characteristics that propel entrepreneurs into success can be exhibited to such an "extreme" that they become problems. Which of the following is NOT one of these characteristics? a) Resourcefulness b) Need for control c) Optimism d) Desire for success

a) Resourcefulness

Which of the following statements is true? a) The left brain helps people analyze and verbalize b) The right brain helps people analyze and verbalize c) The left brain helps people understand analogies and imagine things d) Right and left brain concepts are meaningless

a) The left brain helps people analyze and verbalize

Which of the following is NOT an important characteristic for establishing an intrapreneurially climate? a) Punishment of mistakes b) The presence of explicit goals c) Positive reinforcement d) Feedback

a) Punishment of mistakes

Commitment, determination, and perseverance are the only characteristics one needs to become a successful entrepreneur. (T/F)

False

Creativity cannot be developed or improved. (T/F)

False

Equity financing is money invested in the venture with a legal obligation to repay the principal amount with accrued interest. (T/F)

False

Social entrepreneurs are known to form ventures that exploit opportunities to create social value. (T/F)

False

The macro view of entrepreneurship looks at factors that are specific to the individual entrepreneur. (T/F)

False

Which of the following is NOT an advantage of acquiring an ongoing venture rather than starting a new business? a) Less fear about whether the business model is feasible b) High growth potential associated with recognizing an unmet customer demand c) Reduced time and effort to establish the business d) Potential for acquiring the business at a bargain price

b) High growth potential associated with recognizing an unmet customer demand

Which of the following statements is true? a) They tend to be very reliable in predicting who will and who will not succeed as an entrepreneur b) All three tend to vary based on the situation confronting the entrepreneur c) In combination, they can influence the motivation of the entrepreneur to pursue an opportunity d) The strength of these three characteristics is determined primarily by heredity

c) In combination, they can influence the motivation of the entrepreneur to pursue an opportunity

Which of the following is not a type of debt financing? a) leasing b) trade credit c) private placement d) finance companies

c) private placement

Which of the following was the first to note the role of entrepreneurs in organizing the "factors of production" and shifting them to more profitable opportunities? a) Richard Cantillion b) Vilfredo Pareto c) Jean Baptiste Say d) Stevenson & Carlos

c) Jean Baptiste Say

The person who has the opportunity to lead and "run" with an idea would be coined which of the following? a) Visionary b) Department Manager c) Manager d) Champion

d) Champion

Joseph Schumpeter wrote about a process of entrepreneurial innovation that he learned "creative destruction". Which of the following most closely describes the potential economic effect of the types of innovations Schumpeter was talking about? a) Entrepreneurial arbitrage b) Shifting the production possibilities frontier by meeting more needs with the same amount of resources c) Changing the distribution of wealth as described by Pareto's power law d) Moving supply and demand towards equilibrium

b) Shifting the production possibilities frontier by meeting more needs with the same amount of resources

In the most developed economies, capital goods and automation have taken the place of manual labor -- or makes it more efficient -- and knowledge has become increasingly important. Entrepreneurship in these countries typically contributes to which type of economic growth? a) Factor-driven economic development b) Efficiency-driven economic development c) Innovation-driven economic development d) Opportunity-driven entrepreneurship

c) Innovation-driven economic development

Key elements in plans to create a sustainable future are likely to include which of the following? a) eliminating the concept conservation b) eliminating the concept of accountability c) eliminating the concept of waste d) eliminating the concept of "price"

c) eliminating the concept of waste

To be profitable, total revenue must exceed total cost. Break-even analysis tells us we must look at both a) variable costs and economies of scale b) size of the potential market and how customer segments are defined c) price per unit and total number of units sold d) number of competitors and stage of the product-market life-cycle

c) price per unit and total number of units sold

In attempting to create an entrepreneurial climate, the organization should consider that a) third-party contractors of labor will not be used b) strict management rules work best c) the corporations that promote personal growth will attract the best people d) workers like independence

c) the corporations that promote personal growth will attract the best people

Which of the following type of new venture would involve the least amount of product innovation? a) technological pioneering b) adaptive market energy c) customer value pioneering d) imitative market entry

d) imitative market entry

What are the four types of innovation? a) analysis, synthesis, duplication, retention b) synthesis, extension, retention, analysis c) extension, retention, analysis, duplication d) invention, extension, synthesis, duplication

d) invention, extension, synthesis, duplication

The decision to behave entrepreneurially is the result of the interaction of: a) a new market and new technology b) the relevant business environment and consumer trends c) the existence of a viable business idea and availability of startup capital d) the individual's personal entrepreneurial mind-set and an opportunity

d) the individual's personal entrepreneurial mind-set and an opportunity