Management Chapter 17

Q 17:Which of the following is true of a corporation? A: It is a legal entity that exists separately from its owners. B: It has the advantage of flow-through profits. C: It is relatively inexpensive to set up. D: It does not protect its owners from liability.

A: It is a legal entity that exists separately from its owners.

Q 6: _______ entrepreneurship involves solving problems such as poverty, illiteracy, poor health, and oppression. A: Social B: Necessity-based C: Opportunity-based D: Not-for-profit

A: Social

Q 10: Once a decision is made to go the small business route, the most common ways to get involved are to start one, buy an existing one, or buy and run a franchise. A: True B:False

A: True

Q 1: Research evidence links entrepreneurs with parents who were entrepreneurial and self-employed. A: True B:False

A: True

Q 29: In _________ financing, the business owner borrows money as a loan that must be repaid. A: debt B: equity C: partnership D: limited

A: debt

Q 31: A pressing problem faced by a small business in the birth or start-up stage is A: gaining acceptance in the marketplace. B: finding partners for expansion. C: preparing the initial public offering. D: getting management professional skills.

A: gaining acceptance in the marketplace.

Q 14: Small businesses are most prevalent in the __________ sector of the economy. A: retail B: manufacturing C: transportation D: gaming

A: retail

Q 32: A common reason small business start-ups often fail is A: the owner lacks experience and business skills. B: there is too much government regulation. C: the owner tightly controls money and finances. D: the business grows too slowly.

A: the owner lacks experience and business skills.

Q 28: Trends in U.S. small businesses show A: a growing number owned by minorities. B: fewer of them using the Internet for business. C: more small businesses leaving small communities for the big city. D: fewer of them being family owned.

A: a growing number owned by minorities

Q 20: Almost _________% of U.S. businesses meet the definition of "small business". A: 40 B: 99 C: 75 D: 81

B: 99

Q 12: The two most common ways to finance a business are A: debt and retained earnings. B: debt and equity. C: equity and retained earnings. D: gifts, loans, and inheritances.

B: debt and equity.

Q 30: A venture capitalist who receives an ownership share in return for investing in a new business is providing _________ financing. A: debt B: equity C: limited D: corporate

B: equity

Q 22:A _________ is the most common form of U.S. small business ownership. A: corporation B: sole proprietorship C: general partnership D: limited partnership

B: sole proprietorship

Q 33: A small business owner who wants to pass the business to other family members after retirement or death should prepare a _________ plan. A: retirement B: succession C: partnership D: liquidation

B: succession

Q 13: According to research, most small businesses fail as a result of not preparing a business plan. A: True B:False

B:False

Q 2: Women often become necessity-based entrepreneurs when they have the financial backing to start new ventures. A: True B:False

B:False

Q 3: Social entrepreneurs have unique characteristics compared to other entrepreneurs. A: True B:False

B:False

Q 4: A serial entrepreneur starts one business and runs it till the end of his or her career. A: True B:False

B:False

Q 5: An individual is born an entrepreneur, not made. A: True B:False

B:False

Q 25: People aged __________ are the most entrepreneurially active in the United States. A: 25-34 B: 45-54 C: 55-64 D: 75-84

C: 55-64

Q 9:Among small business owners, firms owned by __________ have shown a growth of 60% over prior numbers, which represent 7% of total businesses. A: women B: Hispanic Americans C: African Americans D: Asian Americans

C: African Americans

Q 26: _________ makes social entrepreneurship unique. A: Lack of other career options B: Focus on international markets C: Refusal to finance by loans D: Commitment to solving social problems

D: Commitment to solving social problems

Q 23: Which of the following personality traits and characteristics is most likely to be shared by entrepreneurs? A: An external locus of control B: A low need for achievement C: A discomfort with uncertainty D: Self-confidence and self-reliance

D: Self-confidence and self-reliance

Q 7: Which of the following is true of classic entrepreneurs? A: They are born, not made. B: They are gamblers. C: They are young. D: They are risk takers.

D: They are risk takers.

Q 27: A _________ protects small business owners from personal liabilities for losses. A: sole proprietorship B: franchise C: limited partnership D: corporation

D: corporation

Q 34: When a new business is quick to capture a market niche before competitors, this is A: intrapreneurship. B: an initial public offering. C: succession planning. D: first-mover advantage.

D: first-mover advantage.

Q 11: Jake runs a small organization and is seeking advice from a legal advisor. His business is currently a sole proprietorship, but he is worried about liability issues. He wants to protect his assets. However, he does not want to incur additional costs or deal with the complexities associated with the other forms of businesses. In this case, the legal advisor's best advice to Jake would be to A: remain a sole proprietorship. B: enter a general partnership. C: form a corporation. D: form a limited liability corporation.

D: form a limited liability corporation.

Q 15: In a __________ owners shares profits, but responsibility for losses is limited to original investments. A: limited liability partnership B: new venture C: general partnership D: limited partnership

D: limited partnership

Q 21: Leela wants to raise money for her business. However, she does not want to give its ownership shares to outsiders. Which of the following ways of financing should Leela choose for her business? A: Angel investor B: Venture capitalist C: Debt financing D: Initial public offering

C: Debt financing

Q 19: If you start a small business and want to avoid losing any more than the original investment, what form of ownership is best? A: Sole proprietorship B: General partnership C: Limited partnership D: Corporation

C: Limited partnership

Q 35: _________ is a personality characteristic common among entrepreneurs. A: External locus of control B: Inflexibility C: Self-confidence D: Low self-reliance

C: Self-confidence

Q 36: Which of the following best describes the birth stage of a small business? A: Complexity of the business expands significantly. B: The business model begins to work well. C: The entrepreneur struggles to establish the venture. D: The entrepreneur experiences market success.

C: The entrepreneur struggles to establish the venture.

Q 24:Which of the following statements is true of entrepreneurs? A: They avoid risk and pursue only safe business options. B: They have inborn qualities that help them succeed in new ventures. C: They use the talent gained from experience as the foundation for success. D: They start with huge amounts of money and proceed to multiply it.

C: They use the talent gained from experience as the foundation for success.

Q 8: Social entrepreneurs A: like to be around other people. B: are motivated by profits. C: have ventures that solve social problems. D: often get more attention than business entrepreneurs.

C: have ventures that solve social problems.

Q 18: Failures of small business start-ups can most often be attributed to A: lack of funding. B: inferior product ideas. C: lack of good management. D: its initial public offering.

C: lack of good management

Q 16: A __________ starts and runs businesses and nonprofits over and over again, moving from one interest and opportunity to the next. A: mompreneur B: classic entrepreneur C: serial entrepreneur D: social entrepreneur

C: serial entrepreneur