Question 1

The average life for an SBA-guaranteed business loan is ____ years.

Accepted Answer

A)  twenty-five 
B)  eighteen 
C)  fifteen 
D)  twelve 
E)  eight 
A)  twenty-five 
B)  eighteen 
C)  fifteen 
D)  twelve 
E)  eight

Question 2

In a franchise business, the party paying the franchise fee is known as the

Accepted Answer

A)  franchisee. 
B)  franchisor. 
C)  entrepreneur. 
D)  business owner. 
E)  manager. 
A)  franchisee. 
B)  franchisor. 
C)  entrepreneur. 
D)  business owner. 
E)  manager.

Question 3

Most Small Business Administration loans are actually made by

Accepted Answer

A)  the Small Business Administration. 
B)  the government. 
C)  private lenders. 
D)  private foundations. 
E)  insurance companies. 
A)  the Small Business Administration. 
B)  the government. 
C)  private lenders. 
D)  private foundations. 
E)  insurance companies.

Question 4

Distribution industries account for approximately what percentage of all small businesses?

Accepted Answer

A)  20 
B)  25 
C)  33 
D)  55 
E)  70 
A)  20 
B)  25 
C)  33 
D)  55 
E)  70

Question 5

How quickly can a small business respond to a new competitor moving into the same block? Why?

Accepted Answer

The speed at which a small business can

Question 6

Imagine that you want to open your own small business. You will probably be most concerned with having

Accepted Answer

A)  a lot of inventory in the warehouse on opening day. 
B)  a really good lawyer and an even better accountant. 
C)  the best Madison Avenue ad agency money can buy. 
D)  a good source of capital and good management skills. 
E)  a top-notch marketing consultant and a lot of inventory in the warehouse. 
A)  a lot of inventory in the warehouse on opening day. 
B)  a really good lawyer and an even better accountant. 
C)  the best Madison Avenue ad agency money can buy. 
D)  a good source of capital and good management skills. 
E)  a top-notch marketing consultant and a lot of inventory in the warehouse.

Question 7

Which of the following is an advantage to the franchisor in a franchise agreement?

Accepted Answer

A)  Opportunity to start a business with limited capital 
B)  Access to local advertising materials 
C)  Fast and selective distribution of products 
D)  Chance to participate in national advertising 
E)  Chance to minimize costs through cooperative buying 
A)  Opportunity to start a business with limited capital 
B)  Access to local advertising materials 
C)  Fast and selective distribution of products 
D)  Chance to participate in national advertising 
E)  Chance to minimize costs through cooperative buying

Question 8

Small businesses are expected to remain the dominant form of organization in this country.

Accepted Answer

A) True 
 B)False

Question 9

What organization issues management, marketing, and technical publications of interest to present and prospective small-business managers that can be obtained from the U.S. Government Printing Office?

Accepted Answer

A)  SBI 
B)  SBIC 
C)  SEC 
D)  SBA 
E)  SBDC 
A)  SBI 
B)  SBIC 
C)  SEC 
D)  SBA 
E)  SBDC

Question 10

Large firms generally buy parts and assemblies from smaller firms because

Accepted Answer

A)  doing so creates goodwill. 
B)  they are required to do so by government regulations. 
C)  they can control small businesses this way. 
D)  it is less expensive than making their own. 
E)  large firms want to keep small firms in business. 
A)  doing so creates goodwill. 
B)  they are required to do so by government regulations. 
C)  they can control small businesses this way. 
D)  it is less expensive than making their own. 
E)  large firms want to keep small firms in business.

Question 11

Which of the following would least likely be started as a small business?

Accepted Answer

A)  Flower shop 
B)  Restaurant 
C)  Electricity company 
D)  Landscaping business 
E)  Furniture repair store 
A)  Flower shop 
B)  Restaurant 
C)  Electricity company 
D)  Landscaping business 
E)  Furniture repair store

Question 12

What are some industries that attract small businesses?

Accepted Answer

Small businesses are attracted to a vari

Question 13

The SBA has defined a small business as one independently owned, operated for profit, and not dominant in its field.

Accepted Answer

A) True 
 B)False

Question 14

Ben has been thinking about going into business. However, he has discounted entering automobile manufacturing because it

Accepted Answer

A)  requires little skill and knowledge. 
B)  is not a part of the production industry. 
C)  requires huge investments in machinery and equipment. 
D)  is unprofitable. 
E)  requires by law a corporate form of business. 
A)  requires little skill and knowledge. 
B)  is not a part of the production industry. 
C)  requires huge investments in machinery and equipment. 
D)  is unprofitable. 
E)  requires by law a corporate form of business.

Question 15

Which form of franchising is the most common today?

Accepted Answer

A)  Franchising has become a very unpopular option and is used infrequently today. 
B)  A manufacturer authorizes a number of retail stores to sell a certain brand- name item. 
C)  A producer licenses distributors to sell a given product to retailers. 
D)  A distributor authorizes a producer to make and sell a given product to the ultimate consumer. 
E)  A franchisor supplies brand names, techniques, or other services instead of a complete product. 
A)  Franchising has become a very unpopular option and is used infrequently today. 
B)  A manufacturer authorizes a number of retail stores to sell a certain brand- name item. 
C)  A producer licenses distributors to sell a given product to retailers. 
D)  A distributor authorizes a producer to make and sell a given product to the ultimate consumer. 
E)  A franchisor supplies brand names, techniques, or other services instead of a complete product.

Question 16

Unlike nonfranchised business owners, franchise owners have little work to do.

Accepted Answer

A) True 
 B)False

Question 17

Which of the following organizations aids small businesses with selling overseas?

Accepted Answer

A)  The U.S. Commercial Service 
B)  The Federal Trade Commission 
C)  Small-Business Investment Company 
D)  Service Corps of Retired Executives 
E)  The Small Business Institute 
A)  The U.S. Commercial Service 
B)  The Federal Trade Commission 
C)  Small-Business Investment Company 
D)  Service Corps of Retired Executives 
E)  The Small Business Institute

Question 18

Through her university, Gwen and her classmates work together to provide management counseling to small businesses in their community. This is called a

Accepted Answer

A)  small-business administration. 
B)  small-business development center. 
C)  small-business investment company. 
D)  small-business institute. 
E)  community improvement council. 
A)  small-business administration. 
B)  small-business development center. 
C)  small-business investment company. 
D)  small-business institute. 
E)  community improvement council.

Question 19

A company generally needs more than ____ employees in order to be considered large.

Accepted Answer

A)  50 
B)  100 
C)  300 
D)  500 
E)  1,000 
A)  50 
B)  100 
C)  300 
D)  500 
E)  1,000

Question 20

What is the main advantage of small business that helps retain effective employees who could earn more at a larger firm?

Accepted Answer

A)  Better pay and employee benefits 
B)  Ability to adapt to change 
C)  Simplified record keeping 
D)  Limited ability to raise capital 
E)  Personal relationships with employees 
A)  Better pay and employee benefits 
B)  Ability to adapt to change 
C)  Simplified record keeping 
D)  Limited ability to raise capital 
E)  Personal relationships with employees

Exam 5: Small Business, Entrepreneurship, and Franchises

The average life for an SBA-guaranteed business loan is ____ years.

In a franchise business, the party paying the franchise fee is known as the

Most Small Business Administration loans are actually made by

Distribution industries account for approximately what percentage of all small businesses?

How quickly can a small business respond to a new competitor moving into the same block? Why?

Imagine that you want to open your own small business. You will probably be most concerned with having

Which of the following is an advantage to the franchisor in a franchise agreement?

Small businesses are expected to remain the dominant form of organization in this country.

What organization issues management, marketing, and technical publications of interest to present and prospective small-business managers that can be obtained from the U.S. Government Printing Office?

Large firms generally buy parts and assemblies from smaller firms because

Which of the following would least likely be started as a small business?

What are some industries that attract small businesses?

The SBA has defined a small business as one independently owned, operated for profit, and not dominant in its field.

Ben has been thinking about going into business. However, he has discounted entering automobile manufacturing because it

Which form of franchising is the most common today?

Unlike nonfranchised business owners, franchise owners have little work to do.

Which of the following organizations aids small businesses with selling overseas?

Through her university, Gwen and her classmates work together to provide management counseling to small businesses in their community. This is called a

A company generally needs more than ____ employees in order to be considered large.

What is the main advantage of small business that helps retain effective employees who could earn more at a larger firm?

Exploring the World of Business and Economics

A: Being Ethical and Socially Responsible

B: Being Ethical and Socially Responsible

A: Exploring Global Business

B: Exploring Global Business

Choosing a Form of Business Ownership

Understanding the Management Process

Creating a Flexible Organization

Producing Quality Goods and Services

Attracting and Retaining the Best Employees

Motivating and Satisfying Employees and Teams

Enhancing Union-Management Relations

Building Customer Relationships Through Effective Marketing

A: Creating and Pricing Products That Satisfy Customers

B: Creating and Pricing Products That Satisfy Customers

Wholesaling, Retailing, and Physical Distribution

Developing Integrated Marketing Communications

Social Media, E-Business, and Accounting

Using Management and Accounting Information

Understanding Money, Banking, and Credit

Mastering Financial Management

A: Understanding Personal Finances and Investments

B: Understanding Personal Finances and Investments

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