Question 1

The Internet has slowed small businesses' participation in international markets.

Accepted Answer

A) True 
 B)False

Question 2

The business plan will include ________.

Accepted Answer

A)  an analysis of the competition 
B)  names of banks the owner plans to visit 
C)  import/export information 
D)  names of employees

Question 3

Small businesses are important to the U.S. economy because

Accepted Answer

A)  they fill in the gaps when large businesses want to let workers go on vacation or when large businesses want to temporarily cease production. 
B)  banks and other financial services companies would not have borrowing customers, because small businesses borrow more than large businesses. 
C)  they pay most of the tax revenue collected by the U.S. government. 
D)  they create about 65% of new jobs each year and generate over 50% of the U.S. GDP.

Question 4

Entrepreneurial spirit is unique to a small business environment.

Accepted Answer

A) True 
 B)False

Question 5

As a future entrepreneur, Brooke considered a variety of financing sources. Her discussions with a venture capitalist revealed that this type of investor expects to receive a large ownership interest in her firm.

Accepted Answer

A) True 
 B)False

Question 6

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.

Question 7

Bankers and investors require entrepreneurs to present a well-conceived business plan.

Accepted Answer

A) True 
 B)False

Question 8

For several years, Addison has volunteered to play the piano and sing at a local nursing home. Now, Addison has decided the time was right to get into the growing eldercare market. She created Music and Memories, a nonprofit corporation that would hire local talent to perform her own music productions directed toward this market. In order to write and produce several productions each year, Addison needed start-up funds. An instructor at the local community college suggested that she begin by ________, because this effort would help introduce her idea to interested investors as well as suggest government grant applications that Addison might pursue.

Accepted Answer

A)  preparing her business plan 
B)  finding talented performers 
C)  writing themed performances such as a Thanksgiving concert and a Valentine's Day concert 
D)  developing a list of start-up costs

Question 9

For prospective entrepreneurs, enrolling in an introduction to business or small business management course offered through their community college

Accepted Answer

A)  is likely to be wasted time since college courses tend to be too theoretical. 
B)  can be helpful by offering them an opportunity to meet experienced small business owners. 
C)  serves as supplementary information, only after starting their business venture. 
D)  seldom provides you with information to help make small business decisions.

Question 10

Entrepreneurs learn that there are many legal and financial issues involved in starting their business. The best way for the small business owner to resolve these issues and protect the firm's resources is

Accepted Answer

A)  for the owner(s) to trust his/her common sense. 
B)  hire a full-time lawyer and accountant who work exclusively for the small business. 
C)  defer making decisions regarding these issues until the company is bigger. 
D)  seek and pay for expert guidance and assistance.

Question 11

Two key management functions that need particular attention when starting a business are

Accepted Answer

A)  human relations and accounting. 
B)  planning and financing. 
C)  marketing and public relations. 
D)  staffing and controlling.

Question 12

The easiest businesses to start also have the least growth potential and the greatest failure rates.

Accepted Answer

A) True 
 B)False

Question 13

Luca has eliminated the risk of entrepreneurship by preparing a detailed business plan.

Accepted Answer

A) True 
 B)False

Question 14

A new business that sets up a(n) ________ from the start is saving itself time and grief later.

Accepted Answer

A)  angel investment network 
B)  good accounting system 
C)  detailed supplier network 
D)  vertical marketing system

Question 15

Exporting offers small businesses opportunities to reduce their dependence on domestic sales and extend product lives.

Accepted Answer

A) True 
 B)False

Question 16

Small businesses create 65% of the new jobs in the United States each year.

Accepted Answer

A) True 
 B)False

Question 17

Jin Yang wants to start a small business. But he has not yet uncovered an opportunity that would offer him security and the possibility of high profits. Jin Yang will likely find that one must risk more in order to attain high profits.

Accepted Answer

A) True 
 B)False

Question 18

An entrepreneurial team consists of

Accepted Answer

A)  managers with similar skills, abilities, and interests. 
B)  experienced professionals from different areas of business. 
C)  a group of wealthy investors who share a vision for a product. 
D)  representatives from management, labor, and the government who work together to solve a company's problems in a creative way.

Question 19

Mini-Case
Pepe Pieman believes that pizza is a much more versatile meal than most people realize. As the national marketing manager for Pizza Pals, he has watched how consumers ate up barbecue pizza, Hawaiian pizza, Mexican pizza, and other new and unique combinations. His superiors, however, met his suggestions for other unusual pizzas with a negative response. Even some of his teammates laughed at his ideas. Pepe's confidence in his ability to understand the market has led him to focus on planning a business of his own. Pepe realizes that he will take a risk when he leaves his job with Pizza Pals and sets off on a new endeavor: Pepe's Pizzazzeria. Pepe is excited about the potential of profitably catering to the unmet desires of pizza consumers.
-Given Pepe's willingness to accept the risks of opening and running Pepe's Pizzazzeria, he is clearly an example of a(n)

Accepted Answer

A)  arbitrageur. 
B)  intrapreneur. 
C)  gambler. 
D)  entrepreneur.

Question 20

One reason we have seen continued growth in home-based businesses is

Accepted Answer

A)  the location offers a more secure operational environment. 
B)  affordable technology makes it easier to compete. 
C)  people need something to do while they wait to return to work for a large corporation. 
D)  it is less risky to start a home-based business than other types of entrepreneurial ventures.

Exam 6: Entrepreneurship and Starting a Small Business

The Internet has slowed small businesses' participation in international markets.

The business plan will include ________.

Small businesses are important to the U.S. economy because

Entrepreneurial spirit is unique to a small business environment.

As a future entrepreneur, Brooke considered a variety of financing sources. Her discussions with a venture capitalist revealed that this type of investor expects to receive a large ownership interest in her firm.

Although successful entrepreneurs are more tolerant of uncertainty,

Bankers and investors require entrepreneurs to present a well-conceived business plan.

For prospective entrepreneurs, enrolling in an introduction to business or small business management course offered through their community college

Entrepreneurs learn that there are many legal and financial issues involved in starting their business. The best way for the small business owner to resolve these issues and protect the firm's resources is

Two key management functions that need particular attention when starting a business are

The easiest businesses to start also have the least growth potential and the greatest failure rates.

Luca has eliminated the risk of entrepreneurship by preparing a detailed business plan.

A new business that sets up a(n) ________ from the start is saving itself time and grief later.

Exporting offers small businesses opportunities to reduce their dependence on domestic sales and extend product lives.

Small businesses create 65% of the new jobs in the United States each year.

Jin Yang wants to start a small business. But he has not yet uncovered an opportunity that would offer him security and the possibility of high profits. Jin Yang will likely find that one must risk more in order to attain high profits.

An entrepreneurial team consists of

One reason we have seen continued growth in home-based businesses is