Question 1

By passing the Immigration Act of 1990, the U.S. government acted to encourage entrepreneurs to immigrate to the United States.

Accepted Answer

A) True 
 B)False

Question 2

The executive summary section of the business plan contains

Accepted Answer

A)  computerized information that readers can access interactively. 
B)  information that will capture the attention of bankers and other investors who receive many business plans every day. 
C)  qualifications, experience, and education of the entrepreneur and prospective employees. 
D)  a financial summary prepared by the business's accountant. 
A)  computerized information that readers can access interactively. 
B)  information that will capture the attention of bankers and other investors who receive many business plans every day. 
C)  qualifications, experience, and education of the entrepreneur and prospective employees. 
D)  a financial summary prepared by the business's accountant.

Question 3

The Making Ethical Decisions box "Should You Stay or Should You Go?" addresses a dilemma worthy of consideration. It describes

Accepted Answer

A)  an unethical situation where the business owner's need for capital causes him/her to delay all payments to suppliers for 120 days, forcing several of his close business relationships out of business. 
B)  the slow death of a business and how important it is to delay payments, sell off assets, and do everything possible to save a failing business except dismissing employees who need their jobs for survival. 
C)  ethical decisions that need to be considered when employees leave a faltering business to start their own, eventually competing against their previous employer. 
D)  the unethical and disloyal decision to leave your family business and start your own, taking with you all the family business's trade secrets. 
A)  an unethical situation where the business owner's need for capital causes him/her to delay all payments to suppliers for 120 days, forcing several of his close business relationships out of business. 
B)  the slow death of a business and how important it is to delay payments, sell off assets, and do everything possible to save a failing business except dismissing employees who need their jobs for survival. 
C)  ethical decisions that need to be considered when employees leave a faltering business to start their own, eventually competing against their previous employer. 
D)  the unethical and disloyal decision to leave your family business and start your own, taking with you all the family business's trade secrets.

Question 4

One of the greatest advantages that small businesses have over larger ones is the ability to know their customers better and to adapt quickly to the customers' needs.

Accepted Answer

A) True 
 B)False

Question 5

Pepe has asked about the possibility of obtaining a microloan from the SBA. This type of loan is awarded primarily on the basis of the

Accepted Answer

A)  borrower's integrity and the soundness of the business idea. 
B)  amount of collateral the borrower can pledge. 
C)  borrower's credit history and record of previous business success. 
D)  age of the borrower, since only senior citizens qualify. 
A)  borrower's integrity and the soundness of the business idea. 
B)  amount of collateral the borrower can pledge. 
C)  borrower's credit history and record of previous business success. 
D)  age of the borrower, since only senior citizens qualify.

Question 6

Discuss the benefits exporting offers to small businesses. Given these benefits, why don't more small firms sell in international markets?

Accepted Answer

a. The world market is potentially a muc

Question 7

Since entrepreneurs are starting new businesses, experience gained from working for an established business isn't particularly helpful.

Accepted Answer

A) True 
 B)False

Question 8

Laila created a new piece of workout gear. She's calling it the Toned Tushie. Although she couldn't initially find potential investors, she secured a personal loan and borrowed additional money from her parents. Her drive to continue believing in her idea and to remain enthusiastic shows that Laila is

Accepted Answer

A)  characteristically self-nurturing. 
B)  better suited to managing a nonprofit organization. 
C)  unaware of the risks she was taking. 
D)  not a true entrepreneur. 
A)  characteristically self-nurturing. 
B)  better suited to managing a nonprofit organization. 
C)  unaware of the risks she was taking. 
D)  not a true entrepreneur.

Question 9

Although successful entrepreneurs are more tolerant of uncertainty,

Accepted Answer

A)  they seldom start another business after a failure. 
B)  they develop mental games to see themselves through the risk game, especially. 
C)  they always protect themselves from failure by taking out lots of insurance. 
D)  they strive to take calculated risks. 
A)  they seldom start another business after a failure. 
B)  they develop mental games to see themselves through the risk game, especially. 
C)  they always protect themselves from failure by taking out lots of insurance. 
D)  they strive to take calculated risks.

Question 10

One of the best places for young entrepreneurs to start shopping for an SBA loan is a

Accepted Answer

A)  Small Business Development Center. 
B)  financial institution specializing in business loans. 
C)  college or university financial aid office. 
D)  website for the Venture Capitalists Association. 
A)  Small Business Development Center. 
B)  financial institution specializing in business loans. 
C)  college or university financial aid office. 
D)  website for the Venture Capitalists Association.

Question 11

Rachel hopes to start her own business soon, but is concerned about her limited financial resources. She should save money by waiting to meet with lawyers and accountants until the business has grown and has been operating successfully for a few years.

Accepted Answer

A) True 
 B)False

Question 12

A major advantage of preparing a formal business plan is that prospective entrepreneurs must identify the resources and activities required to successfully operate their proposed venture.

Accepted Answer

A) True 
 B)False

Question 13

Venture capitalists provide funds for start-up businesses in exchange for part ownership in the new firm.

Accepted Answer

A) True 
 B)False

Question 14

According to the Spotlight on Small Business box, people in college are not ready to start their own business.

Accepted Answer

A) True 
 B)False

Question 15

Entrepreneurs avoid risk and place a high priority on security.

Accepted Answer

A) True 
 B)False

Question 16

Matteo just left the Army after 20 years of service. During his service, he managed to save a little money and is now entitled to a government pension. His wants to go back to his home state of Arizona and start manufacturing small, solar-powered panels for residential use. Although he knows he needs a storefront and an industrial site, he is not 100 percent convinced about where to locate. However, he does know for certain that one of his top priorities is to limit his tax liability associated with this new business. What would you suggest for Matteo?

Accepted Answer

A)  He should make certain he is deeply passionate about the product he is developing, before he explores the need. 
B)  He should keep it small, especially in the beginning. 
C)  He should take out a lot of insurance in case he finds out that he has not paid enough taxes. 
D)  He should check out the enterprise zones in Arizona. 
A)  He should make certain he is deeply passionate about the product he is developing, before he explores the need. 
B)  He should keep it small, especially in the beginning. 
C)  He should take out a lot of insurance in case he finds out that he has not paid enough taxes. 
D)  He should check out the enterprise zones in Arizona.

Question 17

Enterprise zones and investor visas are examples of

Accepted Answer

A)  government policies that favor large corporations rather than small businesses. 
B)  government programs that encourage economic growth through entrepreneurship. 
C)  government policies designed to encourage intrapreneurs. 
D)  examples of private initiatives to reduce the government's role in the economy. 
A)  government policies that favor large corporations rather than small businesses. 
B)  government programs that encourage economic growth through entrepreneurship. 
C)  government policies designed to encourage intrapreneurs. 
D)  examples of private initiatives to reduce the government's role in the economy.

Question 18

An entrepreneurial team is a group of experienced managers who share the same skills and abilities.

Accepted Answer

A) True 
 B)False

Question 19

One way to control the legal costs associated with operating a small business is to purchase a prepaid legal plan.

Accepted Answer

A) True 
 B)False

Question 20

As a high net worth individual, Aria searches for developing companies in need of additional funding to achieve their goals. In return for this ________, she expects to give up some percentage of ownership in the business.

Accepted Answer

A)  analysis 
B)  venture capital 
C)  corporate loan 
D)  securities investment 
A)  analysis 
B)  venture capital 
C)  corporate loan 
D)  securities investment

Exam 6: Entrepreneurship and Starting a Small Business

By passing the Immigration Act of 1990, the U.S. government acted to encourage entrepreneurs to immigrate to the United States.

The executive summary section of the business plan contains

The Making Ethical Decisions box "Should You Stay or Should You Go?" addresses a dilemma worthy of consideration. It describes

One of the greatest advantages that small businesses have over larger ones is the ability to know their customers better and to adapt quickly to the customers' needs.

Pepe has asked about the possibility of obtaining a microloan from the SBA. This type of loan is awarded primarily on the basis of the

Discuss the benefits exporting offers to small businesses. Given these benefits, why don't more small firms sell in international markets?

Since entrepreneurs are starting new businesses, experience gained from working for an established business isn't particularly helpful.

Although successful entrepreneurs are more tolerant of uncertainty,

One of the best places for young entrepreneurs to start shopping for an SBA loan is a

Rachel hopes to start her own business soon, but is concerned about her limited financial resources. She should save money by waiting to meet with lawyers and accountants until the business has grown and has been operating successfully for a few years.

A major advantage of preparing a formal business plan is that prospective entrepreneurs must identify the resources and activities required to successfully operate their proposed venture.

Venture capitalists provide funds for start-up businesses in exchange for part ownership in the new firm.

According to the Spotlight on Small Business box, people in college are not ready to start their own business.

Entrepreneurs avoid risk and place a high priority on security.

Enterprise zones and investor visas are examples of

An entrepreneurial team is a group of experienced managers who share the same skills and abilities.

One way to control the legal costs associated with operating a small business is to purchase a prepaid legal plan.

As a high net worth individual, Aria searches for developing companies in need of additional funding to achieve their goals. In return for this ________, she expects to give up some percentage of ownership in the business.

Taking Risks and Making Profits Within the Dynamic Business Environment

Understanding Economics and How It Affects Business

Doing Business in Global Markets

Demanding Ethical and Socially Responsible Behavior

How to Form a Business

Management and Leadership

Structuring Organizations for Todays Challenges

Production and Operations Management

Motivating Employees

Human Resource Management: Finding and Keeping the Best Employees

Dealing With Employeemanagement Issues

Marketing: Helping Buyers Buy

Developing and Pricing Goods and Services

Distributing Products

Using Effective Promotions

Understanding Accounting and Financial Information

Financial Management

Using Securities Markets for Financing and Investing Opportunities

Money, Financial Institutions, and the Federal Reserve

Appendix: Working Within the Legal Environment

Appendix: Using Technology to Manage Information

Appendix: Managing Risk

Appendix: Managing Personal Finances

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