entrp mcqs 1-3
TRANSCRIPT
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Entrepreneurship: Successfully Launching New Ventures, 3/e
Chapter 1: Introduction to Entrepreneurship
Chapter 2: Recognizing Opportunities and Generating Ideas
Chapter 3: Feasibility Analysis
Chapter 4: Writing a Business Plan
Chapter 5: Industry and Competitor Analysis
Chapter 6: Developing an Effective Business Model
Chapter 7: Preparing the Proper Ethical and Legal Foundation
Chapter 8: Assessing a New Venture’s Financial Strength and Viability
Chapter 9: Building a New Venture Team
Chapter 10: Getting Financing or Funding
Chapter 11: Unique Marketing Issues
Chapter 12: The Importance of Intellectual Property
Chapter 13: Preparing for and Evaluating the Challenges of Growth
Chapter 14: Strategies for Firm Growth
Chapter 15: Franchising
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Chapter # 1Introduction to Entrepreneurship
Explain entrepreneurship and discuss its importance.
Describe corporate entrepreneurship and its use in established firms.
Discuss three main reasons people decide to become entrepreneurs.
Identify four main characteristics of successful entrepreneurs.
Explain the five common myths regarding entrepreneurship.
Explain how entrepreneurial firms differ from salary-substitute and lifestyle firms.
Discuss the changing demographics of entrepreneurs in the United States.
Discuss the impact of entrepreneurial firms on economies and societies.
Identify ways in which large firms benefit from the presence of smaller entrepreneurial firms.
Explain the entrepreneurial process.
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Global 3E
Chapter Quiz
This activity contains 22 questions.
Entrepreneurial behavior typically requires all of the following EXCEPT:
invention of something new.
willingness to take risks.
drive.
creativity.
_____ is the position of a firm on a continuum ranging from highly conservative to highly entrepreneurial.
Risk tolerance
Entrepreneurial intensity
Inventiveness
Organizational bureaucracy
What is the most common reason given for why people choose to become entrepreneurs?
To make a lot of money.
To escape the long hours associated with corporate jobs.
To be their own boss.
To be able to retire early.
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Some entrepreneurs report that the financial rewards associated with entrepreneurship can be bittersweet if they are accompanied by ________.
modest upside potential
the thrill of starting a business
motivating factors
losing control of the firm
All of the following are characteristics shared by successful entrepreneurs EXCEPT:
passion.
risk averse.
product/customer focus.
tenacity despite failure.
Which of the following is NOT a common myth about entrepreneurs?
Everyone has the potential to be an entrepreneur.
Entrepreneurs are born, not made.
Entrepreneurs are gamblers.
Entrepreneurs love the spotlight.
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What do you call small firms that yield a level of income for their owner that is similar to what they would earn when working for an employer?
sole proprietorship
small business
lifestyle firm
salary-substitute firm
_____ of the 26 million businesses in the Unites States are owned by women, minorities, seniors, and young people.
A growing number
An insignificant portion
A declining amount
An unknown quantity
Influence on innovation and job creation best typifies entrepreneurial firms' ________.
impact on society
economic impact
impact on larger firms
impact on the environment
The entrepreneurial process is comprised of each of the following
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steps EXCEPT:deciding to become an entrepreneur.
inventing a new product or process.
managing and growing the entrepreneurial firm.
moving from an idea to an entrepreneurial firm.
In the United States, approximately one-third of new firms fail within their first four years.
True
False
Entrepreneur and inventor mean essentially the same thing.
True
False
Entrepreneurship only pertains to starting new businesses, not existing firms.
True
False
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The average entrepreneur does NOT make more money than someone with a similar amount of responsibility in a traditional job.
True
False
The number one characteristic shared by successful entrepreneurs is creativity.
True
False
Execution intelligence refers to developing a business model, putting together financial resources, and leading people towards transforming an idea into a business.
True
False
According to research, most entrepreneurs are born, not made.
True
False
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Only individuals that thrive on taking big risks have the right personality to be an entrepreneur.
True
False
After winning a medal for diving in the Olympics, Cheryl starts a diving instruction school. This is an example of a lifestyle firm.
True
False
In recent years, the fastest growing areas for women-owned firms have been in cosmetology, fashion merchandising, and hair salons.
True
False
Discus entrepreneurship's importance to the economy and society as a whole:
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What are the steps of the entrepreneurial process?
1. Entrepreneurial behavior typically requires all of the following EXCEPT:
Your Answer:
invention of something new.
2. _____ is the position of a firm on a continuum ranging from highly conservative to highly entrepreneurial.
Your Answer:
Risk tolerance
Correct Answer:
Entrepreneurial intensity
p. 31
3. What is the most common reason given for why people choose to become entrepreneurs?
Your Answer:
To make a lot of money.
Correct Answer:
To be their own boss.
p. 31
4. Some entrepreneurs report that the financial rewards associated with entrepreneurship can be bittersweet if they are accompanied by ________.
Your Answer:
modest upside potential
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Correct Answer:
losing control of the firm
p. 33
5. All of the following are characteristics shared by successful entrepreneurs EXCEPT:
Your Answer:
passion.
Correct Answer:
risk averse.
p. 33
6. Which of the following is NOT a common myth about entrepreneurs?
Your Answer:
Everyone has the potential to be an entrepreneur.
7. What do you call small firms that yield a level of income for their owner that is similar to what they would earn when working for an employer?
Your Answer:
sole proprietorship
Correct Answer:
salary-substitute firm
p. 41
8. _____ of the 26 million businesses in the Unites States are owned by women, minorities, seniors, and young people.
Your Answer:
A growing number
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9. Influence on innovation and job creation best typifies entrepreneurial firms' ________.
Your Answer:
impact on society
Correct Answer:
economic impact
p. 45
10.
The entrepreneurial process is comprised of each of the following steps EXCEPT:
Your Answer:
deciding to become an entrepreneur.
Correct Answer:
inventing a new product or process.
p. 47
11.
In the United States, approximately one-third of new firms fail within their first four years.
Your Answer:
True
12.
Entrepreneur and inventor mean essentially the same thing.
Your Answer:
True
Correct Answer:
False
p. 30
13.
Entrepreneurship only pertains to starting new businesses, not existing firms.
Page
Your Answer:
True
Correct Answer:
False
p. 31
14.
The average entrepreneur does NOT make more money than someone with a similar amount of responsibility in a traditional job.
Your Answer:
True
15.
The number one characteristic shared by successful entrepreneurs is creativity.
Your Answer:
True
Correct Answer:
False
p. 33
16.
Execution intelligence refers to developing a business model, putting together financial resources, and leading people towards transforming an idea into a business.
Your Answer:
True
17.
According to research, most entrepreneurs are born, not made.
Your Answer:
True
Correct Answer:
False
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p. 39
18.
Only individuals that thrive on taking big risks have the right personality to be an entrepreneur.
Your Answer:
True
Correct Answer:
False
p. 40
19.
After winning a medal for diving in the Olympics, Cheryl starts a diving instruction school. This is an example of a lifestyle firm.
Your Answer:
True
20.
In recent years, the fastest growing areas for women-owned firms have been in cosmetology, fashion merchandising, and hair salons.
Your Answer:
True
Correct Answer:
False
p. 43
21.
Discus entrepreneurship's importance to the economy and society as a whole:
Your Answer:
A
ECONOMY:-Innovation-Job creation
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SOCIETY: -Improvements in healthcare-Help people be more productive-Products and services that make our lives easier-Products and services that entertain us
ASSIST LARGER FIRMS: -Provide Components-Efficiency-Partnering
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22.
What are the steps of the entrepreneurial process?
Your Answer:
A
Step 1. Deciding to become an entrepreneurStep 2. Developing successful business ideasStep 3. Moving from an idea to an entrepreneurial firmStep 4. Managing and growing the entrepreneurial firm
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Chapter # 2Recognizing Opportunities and
Generating Ideas
Explain why it’s important to start a new firm when its “window of opportunity” is open.
Explain the difference between an opportunity and an idea.
Describe the three general approaches entrepreneurs use to identify opportunities.
Identify the four environmental trends that are most instrumental in creating business opportunities.
List the personal characteristics that make some people better at recognizing business opportunities than others.
Identify the five steps in the creative process.
Describe the purpose of brainstorming and its use as an idea generator.
Describe how to use library and Internet research to generate new business ideas.
Explain the purpose of maintaining an idea bank.
Describe three steps for protecting ideas from being lost or stolen.
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Chapter Quiz
This activity contains 22 questions.
_____ is a favorable set of circumstances that creates a need for a new product, service, or business.
A niche
A venture
A trend
An opportunity
Each of the following are ways to identify an opportunity EXCEPT:
observing trends.
solving a problem.
trying out alternative uses of existing products.
finding gaps in the marketplace.
Which environmental force pertains most to a trend such as the continual increase in the use of cell phones?
economic forces
social forces
technological advances
political and regulatory changes
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Entrepreneurs can recognize problems and find ways to solve them through each of the following EXCEPT:
recognizing problems in emerging trends.
identifying a currently available product or service and then building a business around a better version.framing a problem differently than it's been thought of before, and then proposing an appropriate solution.experiencing a problem in one's own life, and then realizing the solution represents a business opportunity.
All of the following are characteristics shared by those who excel at recognizing opportunities EXCEPT:
brainstorming.
prior experience.
entrepreneurial alertness.
social contacts and ties with others.
_____ is the process of generating a novel or useful idea.
Serendipity
Intuition
Opportunism
Creativity
What is the first stage of the creativity process?
Incubation
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Preparation
Insight
Evaluation
Which technique for generating ideas depends on freewheeling, the carefree expression of ideas free of rules or restraints?
focus groups
Benchmarking
Brainstorming
Projection
Focus groups usually work best as a ________.
follow up to brainstorming
way to increase creativity
substitute for brainstorming
way to survey large numbers of people
An underutilized source of information for generating business ideas is ________.
the consulting firm
the library
the focus group
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Brainstorming
An idea is a favorable set of circumstances that creates a need for a new product, service, or business.
True
False
Window of opportunity relates to the time period in which a firm can realistically enter a new market.
True
False
As an entrepreneur, it is important to be aware of changes in trends.
True
False
Major retailers that serve large groups of customers with similar needs by competing mainly on price would be an example of finding gaps in the marketplace.
True
False
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Often, entrepreneurs are able to pursue an opportunity even before it is recognized as an opportunity.
True
False
Entrepreneurial alertness is largely a learned skill.
True
False
It is more likely that an entrepreneur will get a business idea through a weak-tie relationship (infrequent interaction between casual acquaintances), than through a strong-tie relationship (frequent interaction between friends and co-workers).
True
False
Studies show that less than a quarter of start-up ideas emerge from a
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person's prior work experience.
True
False
Brainstorming sessions are structured discussions that stay focused on one idea until an opportunity is identified.
True
False
Much of the effectiveness of a focus group session depends on the careful recruiting of over 20 participants.
True
False
What are the essential qualities of an opportunity?
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Researchers have identified several characteristics that tend to make some people better at recognizing opportunities than others. Discuss them.
1. _____ is a favorable set of circumstances that creates a need for a new product, service, or business.
Your Answer:
A niche
Correct Answer:
An opportunity
See p. 69 for more information.
2. Each of the following are ways to identify an opportunity EXCEPT:
Your Answer:
observing trends.
Correct Answer:
trying out alternative uses of existing products.
See p. 70 for more information.
3. Which environmental force pertains most to a trend such as the continual increase in the use of cell phones?
Your Answer:
economic forces
Correct Answer:
social forces
See p. 73 for more information.
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4. Entrepreneurs can recognize problems and find ways to solve them through each of the following EXCEPT:
Your Answer:
recognizing problems in emerging trends.
Correct Answer:
identifying a currently available product or service and
then building a business around a better version.
See p. 76 for more information.
5. All of the following are characteristics shared by those who excel at recognizing opportunities EXCEPT:
Your Answer:
brainstorming.
6. _____ is the process of generating a novel or useful idea.
Your Answer:
Serendipity
Correct Answer:
Creativity
See p. 83 for more information.
7. What is the first stage of the creativity process?
Your Answer:
Incubation
Correct Answer:
Preparation
See p. 83 for more information.
8. Which technique for generating ideas depends on freewheeling, the carefree expression of ideas free of rules or restraints?
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Your Answer:
focus groups
Correct Answer:
Brainstorming
See p. 85 for more information.
9. Focus groups usually work best as a ________.
Your Answer:
follow up to brainstorming
10.
An underutilized source of information for generating business ideas is ________.
Your Answer:
the consulting firm
Correct Answer:
the library
See p. 87 for more information.
11.
An idea is a favorable set of circumstances that creates a need for a new product, service, or business.
Your Answer:
True
Correct Answer:
False
See p. 70 for more information.
12.
Window of opportunity relates to the time period in which a firm can realistically enter a new market.
Your Answer:
True
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13.
As an entrepreneur, it is important to be aware of changes in trends.
Your Answer:
True
14.
Major retailers that serve large groups of customers with similar needs by competing mainly on price would be an example of finding gaps in the marketplace.
Your Answer:
True
Correct Answer:
False
See p. 79 for more information.
15.
Often, entrepreneurs are able to pursue an opportunity even before it is recognized as an opportunity.
Your Answer:
True
Correct Answer:
False
See p. 81 for more information.
16.
Entrepreneurial alertness is largely a learned skill.
Your Answer:
True
17.
It is more likely that an entrepreneur will get a business idea through a weak-tie relationship (infrequent interaction between casual acquaintances), than through a strong-tie relationship (frequent interaction between friends and co-workers).
Page
Your Answer:
True
18.
Studies show that less than a quarter of start-up ideas emerge from a person's prior work experience.
Your Answer:
True
Correct Answer:
False
See p. 81 for more information.
19.
Brainstorming sessions are structured discussions that stay focused on one idea until an opportunity is identified.
Your Answer:
True
Correct Answer:
False
See p. 85 for more information.
20.
Much of the effectiveness of a focus group session depends on the careful recruiting of over 20 participants.
Your Answer:
True
Correct Answer:
False
See p. 86 for more information.
21.
What are the essential qualities of an opportunity?
Your Answer:
A
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-Attractive-Durable-Timely-Anchored in or relates to a product or service that creates or adds value for its user
22.
Researchers have identified several characteristics that tend to make some people better at recognizing opportunities than others. Discuss them.
Your Answer:A
-prior experience in an industry helps entrepreneurs recognize business opportunities
-entrepreneurs may be better than others at sizing up the marketplace and inferring likely implications
-having extensive social and professional contacts exposes entrepreneurs to opportunities and ideas
-creativity helps the opportunity recognition process
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Chapter # 3Feasibility Analysis
Explain what a feasibility analysis is and why it’s important.
Discuss the proper time to complete a feasibility analysis when developing an entrepreneurial venture.
Describe the purpose of a product/service feasibility analysis and the two primary issues that a proposed business should consider in this area.
Explain a concept statement and its contents.
Describe the purpose of a buying intentions survey and how it’s administered.
Explain the importance of library, Internet, and gumshoe research.
Describe the purpose of industry/market feasibility analysis and the two primary issues to consider in this area.
Discuss the characteristics of an attractive industry.
Describe the purpose of organizational feasibility analysis and list the two primary issues to consider in this area.
Explain the importance of financial feasibility analysis and list the most critical issues to consider in this area.
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Chapter Quiz
This activity contains 22 questions.
The most effective businesses emerge from a process that includes each of the following EXCEPT:
recognizing a business idea.
testing the feasibility of the idea.
writing a business plan.
securing angel investment.
Which of the following is an example of primary research?
census data
industry studies
administering surveys
analyst forecasts
_____ is an assessment of the overall appeal of the product or service being proposed.
Concept testing
Product/service feasibility analysis
Test marketing
Usability testing
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All of the following are normally included in the concept test EXCEPT:
detailed financial statements.
a description of the product or service.
the intended target market.
the benefits of the product or service.
All of the following are suitable questions to ascertain Product/Service Desirability EXCEPT:
Does it make sense?
Is the product or service financially feasible?
Is this a good time to introduce the product or service in the market?
Are there any fatal flaws in the product or service's basic design or concept?
All of the following are characteristics of attractive industries EXCEPT:
the industry is young.
the industry is fragmented.
the industry is crowded.
the industry has high operating margins.
_____ is conducted to determine whether a proposed business has sufficient management expertise, organizational competence, and resources to successfully launch its business.
A marketing plan
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Financial feasibility analysis
Industry/market feasibility analysis
Organizational feasibility analysis
The ability to obtain intellectual property protection on key aspects of the business is most likely an issue related to _____.
financial performance of similar firms
industry attractiveness
resource sufficiency
second-mover advantage
Which of the following is the final step of a comprehensive feasibility analysis?
financial feasibility analysis
marketing research
filing articles of incorporation
industry/market feasibility analysis
The projected financial return to assess whether the venture is financially feasible considers each of the following EXCEPT:
availability of equity capital.
amount of capital invested.
existing alternatives for the money being invested.
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risks assumed in launching the business.
The process of determining if a business idea is viable is the development of a business plan.
True
False
Many entrepreneurs make the mistake of identifying a business idea and then jumping directly to writing a business plan to describe and gain support for the idea.
True
False
A concept test is the first physical depiction of a new product.
True
False
True
False
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Three important ways to accumulate evidence that there will be healthy demand for a product or service are with library, Internet and gumshoe research.
True
False
An industry is a group of firms producing a similar product or service.
True
False
A target market is a place within a larger market segment that represents a broader group of customers with different needs.
True
False
Two of the most important factors related to management prowess are passion for the business idea and understanding the markets in
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which the firm will participate.
True
False
The adequacy of the labor pool poses a resource sufficiency issue.
True
False
For feasibility analysis, it is not typically required that an entrepreneur do a rigorous financial assessment.
True
False
What are the major components of a comprehensive feasibility analysis?
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The most effective businesses emerge from a process that includes each of the following EXCEPT:
Your Answer:
recognizing a business idea.
Correct Answer:
securing angel investment.
See p. 105 for more information.
2. Which of the following is an example of primary research?
Your Answer:
census data
Correct Answer:
administering surveys
See p. 107 for more information.
3. _____ is an assessment of the overall appeal of the product or service being proposed.
Your Answer:
Concept testing
Correct Answer:
Product/service feasibility analysis
See p. 107 for more information.
4. All of the following are normally included in the concept test EXCEPT:
Your Answer:
detailed financial statements.
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5. All of the following are suitable questions to ascertain Product/Service Desirability EXCEPT:
Your Answer:
Does it make sense?
Correct Answer:
Is the product or service financially feasible?
See p. 108 for more information.
6. All of the following are characteristics of attractive industries EXCEPT:
Your Answer:
the industry is young.
Correct Answer:
the industry is crowded.
See p. 113 for more information.
7. _____ is conducted to determine whether a proposed business has sufficient management expertise, organizational competence, and resources to successfully launch its business.
Your Answer:
A marketing plan
Correct Answer:
Organizational feasibility analysis
See p. 117 for more information.
8. The ability to obtain intellectual property protection on key aspects of the business is most likely an issue related to _____.
Your Answer:
financial performance of similar firms
Correct Answer:
resource sufficiency
See p. 117 for more information.
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9. Which of the following is the final step of a comprehensive feasibility analysis?
Your Answer:
financial feasibility analysis
10.
The projected financial return to assess whether the venture is financially feasible considers each of the following EXCEPT:
Your Answer:
availability of equity capital.
11.
The process of determining if a business idea is viable is the development of a business plan.
Your Answer:
True
Correct Answer:
False
See p. 105 for more information
12.
Many entrepreneurs make the mistake of identifying a business idea and then jumping directly to writing a business plan to describe and gain support for the idea.
Your Answer:
True
13.
A concept test is the first physical depiction of a new product.
Your Answer:
True
Correct Answer:
False
See p. 108 for more information.
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14.
Some entrepreneurs conduct their initial product/ service feasibility analysis by simply talking about their product or service idea with others before deciding to move forward.
Your Answer:
True
15.
Three important ways to accumulate evidence that there will be healthy demand for a product or service are with library, Internet and gumshoe research.
Your Answer:
True
16.
An industry is a group of firms producing a similar product or service.
Your Answer:
True
17.
A target market is a place within a larger market segment that represents a broader group of customers with different needs.
Your Answer:
True
Correct Answer:
False
See p. 115 for more information.
18.
Two of the most important factors related to management prowess are passion for the business idea and understanding the markets in which the firm will participate.
Your Answer:
True
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19.
The adequacy of the labor pool poses a resource sufficiency issue.
Your Answer:
True
20.
For feasibility analysis, it is not typically required that an entrepreneur do a rigorous financial assessment.
Your Answer:
True
21. What are the major components of a comprehensive feasibility analysis?
Your Answer:
a
-Product/service feasibility analysis-Industry/market feasibility analysis-Organizational feasibility analysis-Financial feasibility analysis
22. Discuss the four step process effective businesses emerge from.
Your Answer:
a
-Recognizing a business idea-Testing the feasibility of the idea-Writing a business plan-Launching the business