INTRODUCTION TO ENTREPRENEURSHIPChoose the one alternative that best completes the statement or answers the question. 1) Among minorities, ________ -owned firms had the highest growth rate from 1996 to 2010. A) Pacific Islander B) American Indian C) African American D) Latino E) Asian American 2) The Savvy Entrepreneurial Firm feature in Chapter 1 focuses on Revio Mobile (maker of Angry Birds) and Zeo, two companies that have produced successful products. The feature's main purpose is to illustrate the importance of ________ as a key characteristic of the founders of entrepreneurial firms. A) A desire to pursue financial rewards B) Product/customer focus C) Execution intelligence D) Passion for the business E) Tenacity despite failure 3) According to the textbook, there are three types of startup firms: A) Innovative firms, entrepreneurial firms, and standard firms B) Entrepreneurial firms, standard-of-living firms, and statutory firms C) Lifestyle firms, salary-substitute firms, and entrepreneurial firms D) Lifestyle firms, general firms, and entrepreneurial firms E) Standard-of-living firms, statutory firms, and general firms 4) Which of the following is not one of the four steps of the entrepreneurial process? A) Deciding to become an entrepreneur B) Moving from an idea to an entrepreneurial firm C) Determining how to seize the spotlight D) Managing and growing the entrepreneurial firm E) Developing successful business ideas 5) James Quinn is starting a firm in the financial services industry primarily to pursue financial rewards. According to the textbook, starting a business to make a lot of money: A) Is the number two reason that people start their own business, right behind the lack of better career prospects? B) is equally as satisfying as other reasons for starting a business C) Is the number one reason people start their own business D) Often fails to live up to its hype E) Does not rank among the top three reasons that people start their own business 6) As new products that are better than the existing generation of products are introduced, sales normally increase because the new products provide consumers increased value or worth. This process, which is called ________, stimulates economic activity, which is a good thing for the economy. A) Repetitive destruction 1 pursue their own ideas. and eliminate risk in their lives D) Take big risks. Tahoe Trips & Trails is an example of a(n) ________ firm. Death Valley. realize financial rewards. Yosemite. The company was started by Hanna Sullivan. A) salary-substitute B) Entrepreneurial C) Statutory D) Lifestyle E) standard-of-living 2 . an individual that gave up a prestigious job with a private investment company because Tahoe Trips & Trails better accommodates her personal lifestyle. B) Iterative destruction C) Inventive replacement D) Creative destruction E) Iterative replacement 7) The number one characteristic shared by successful entrepreneurs is: A) A desire to achieve financial rewards B) A desire to bring a revolutionary new product or service to market C) Passion for the business D) A desire to fulfill a lifetime dream E) A desire to employ other people 8) The three primary reasons that people become entrepreneurs and start their own firms are to: A) Be their own boss. and realize financial rewards C) Gain prestige. and realize financial rewards B) Take advantage of government subsidies. be their own boss. a company mentioned in Chapter 1. and provide their owner or owners the opportunity to pursue a particular lifestyle and earn a living while doing so E) Bring to market new products and services that are not particularly innovative 11) Tahoe Trips & Trails. be their own boss. and similar locations. pursue their own ideas. leads multiday outdoor adventure trips for private groups and corporate clients to Lake Tahoe. and gain prestige 9) Which of the following was not identified in the textbook as one of the five primary reasons passion is important for the launch of a successful entrepreneurial organization? A) The ability to listen to feedback on the limitations of your organization and yourself B) Perseverance and persistence when the going gets tough C) The ability to stick to a plan even when faced with evidence that changes are needed D) A willingness to work hard for an extended period of time E) Ability to overcome setbacks and "no's" 10) Entrepreneurial firms: A) Are small firms that yield a level of income for their owner or owners that is similar to what they would earn when working for an employer B) Provide their owner or owners the opportunity to pursue a particular lifestyle and earn a living while doing so C) Bring new products and services to market by creating and seizing opportunities D) Offer to customers common products that are not particularly innovative. and do what they were "born" to do E) Do what they were "born" to do. managing and growing the entrepreneurial firm 13) In the book The Theory of Economic Development. deciding to become an entrepreneur. developing successful business ideas. of a successful entrepreneur? A) Tenacity despite failure B) A desire to gain financial rewards C) Product/customer focus D) A desire to please consumers E) Execution intelligence 17) According to Chapter 1. moving from an idea to an entrepreneurial firm. This process is called creative destruction. Stevenson 14) The What Went Wrong? Feature in Chapter 1 focuses on YouCaster. According to the feature. a company that was launched in 2006 but eventually went out of business. who is at heart a craftsperson. developing successful business ideas. recently started a firm to manufacturer a new innovative food blender. the number one reason that people become entrepreneurs is to: A) Be their own boss B) Continue a family tradition C) Pursue their own ideas D) Realize financial rewards E) Gain prestige 16) Stacey Wills. managing the growing entrepreneurial firm C) Managing and growing the entrepreneurial firm.12) Which of the following is the correct sequence for the four steps in the entrepreneurial process? A) Developing successful business ideas. deciding to become an entrepreneur. ________ argued that entrepreneurs develop new products and technologies that over time make current products and technologies obsolete. A) Joseph Schumpeter B) Michael Porter C) Thomas Friedman D) Jim Collins E) H. YouCaster failed for two primary reasons: A) Too few customers and a lack of intellectual property protection B) A lack of passion and too few customers C) A poorly equipped team of entrepreneurs and a lack of passion D) A lack of execution intelligence and a poor product/customer focus E) A lack of resolve and poor execution intelligence 15) According to the textbook. moving from an idea to an entrepreneurial firm.H. moving from an idea to an entrepreneurial firm. Stacey's story best illustrates which of the following characteristics. deciding to become an entrepreneur. a sentiment that venture capitalists often express is that: A) They would never fund a strong entrepreneur with a weak business idea 3 . or attributes. managing and growing the entrepreneurial firm B) Deciding to become an entrepreneur. moving from an idea to an entrepreneurial firm. Stacey's desire is to sell her food blender to as many people as possible. because she firmly believes in the merits of her product. moving from an idea to an entrepreneurial firm D) Developing successful business ideas. managing and growing the entrepreneurial firm E) Deciding to become an entrepreneur. developing successful business ideas. C) Entrepreneurs love the spotlight. entrepreneurs are: A) Gamblers B) Moderate risk takers C) Minimal risk takers D) Forceful risk takers E) Aggressive risk takers 19) The Partnering for Success feature in Chapter 1 focuses on how pharmaceutical products are brought to market. B) A new venture's marketing plan is more important than either the strength of the entrepreneur or the strength of the business idea C) The strength of the entrepreneur and the strength of the business idea are of equal importance D) They would rather fund a strong entrepreneur with a mediocre business idea than fund a strong business idea with a mediocre entrepreneur E) They would rather fund a strong business idea with a mediocre entrepreneur than fund a strong entrepreneur with a mediocre business idea 18) According to the textbook. the majority of people in high-income countries are drawn to entrepreneurship: A) Because an important role model was an entrepreneur B) To gain prestige C) Due to lack of career prospects D) To take advantage of an attractive opportunity E) As a result of government incentives 21) Which of the following statements is not true about women-owned businesses in the United States? A) Women-owned firms still trail male-owned businesses in terms of sales and profits. particularly in the pharmaceutical industry B) Large firms and smaller entrepreneurial firms can often produce the best results by partnering with each other rather than acting as adversaries C) the most compelling partnerships between smaller entrepreneurial firms and large firms allow both categories of firms to be generalists. particularly in the pharmaceutical industry 20) According to the Global Entrepreneurship Monitor (GEM) 2007 study. The "lesson learned" from the feature for entrepreneurs is: A) Partnerships between smaller entrepreneurial firms and large firms almost always favor the smaller entrepreneurial firms. B) Entrepreneurs are born not made. E) The top industry for women-owned firms is manufacturing. B) There are a growing number of groups that support and advocate for women-owned businesses. particularly in the pharmaceutical industry E) It rarely works out for large firms and smaller entrepreneurial firms to partner with each other. 22) Which of the following is not one of the five common myths about entrepreneurs? A) Entrepreneurs are tenacious. C) The number of women-owned businesses is increasing. and not focus strictly on their areas of expertise D) Partnerships between smaller entrepreneurial firms and large firms almost always favor the large firm. 4 . D) Over 50% of women-owned firms are home-based. parasailors. product/customer focus. passion for the business. and risk taking C) Proactive. not innovative. D) Entrepreneurs should be young and energetic. and take a "wait and see" posture E) Taking a "wait and see" posture. The company makes apparel products for extreme sports enthusiasts such as rock climbers. To achieve that goal. young and energetic. and seeks recognition 25) According to the textbook. and product/customer focus D) Passion for the business. forward thinking.8 percent D) 7.5 percent B) 9. the four characteristics of successful entrepreneurs are: A) Passion for the business. on the cutting edge of technological change. seeks recognition. and risk taking 5 . A) 5. and risk averse B) Proactive. and execution intelligence B) Passion for the business. and risk taking D) Innovative.5 percent 27) Sarah Thorton is the founder of a company named Extreme Sports Apparel. risk averse. very charismatic. and execution intelligence E) Young and energetic.6 percent E) 12. Sarah's firm should be: A) Taking a "wait and see" posture.0 percent C) 3. about ________ of adults in the United States are either starting a business or are running a business that has been in existence for less than 3 1/2 years. tenacity despite failure. 23) Which of the following was not identified in the textbook as one of the common traits and characteristics of entrepreneurs? A) Intolerant of ambiguity B) Has a strong work ethic C) Promoter D) Decisive E) Visionary 24) According to the textbook. entrepreneurship has historically had: A) A major impact on the economy and minor impact on society B) A minor impact on both the economy and society C) No impact on either the economy or society D) A major impact on society and minor impact on the economy E) A major impact on both the economy and society 26) According to the Global Entrepreneurship Monitor (GEM) 2010 survey. tenacity despite failure. and BMX bikers. Sarah wants her company to pursue a high level of corporate entrepreneurship. and tenacity despite failure C) On the cutting edge of technological change. not innovative. innovative. triathletes. E) Entrepreneurs are moderate risk takers. innovative. product/customer focus. According to the textbook. D) Growing worries among seniors that they need to earn additional income to pay for future health care services and other expenses E) An increasing desire among older workers for more personal fulfillment in their lives 31) Netflix is an established firm that encourages and emphasizes entrepreneurial behavior throughout its various divisions. and Zynga are examples of ________ firms. A) Creativity B) Modernism C) Execution D) Creative destruction E) Innovation 33) According to the textbook. which is central to the entrepreneurial process. Facebook. Google.28) Which of the following is not a personality trait or characteristic common among entrepreneurs? A) Short attention span B) Visionary C) Self-starter D) Promoter E) Alert to opportunities 29) According to the textbook. there are three types of startup firms: entrepreneurial firms. A) Industry-standard B) Standard-of-living C) Ssalary-substitute D) Lifestyle E) Entrepreneurial 30) Which of the following was not given in the textbook as a reason for the increase in the number of senior entrepreneurs? A) Corporate downsizing B) Seniors tend to be more passionate about new business ideas than middle-aged or younger prospective entrepreneurs. Netflix practices: A) Business entrepreneurship B) Enterprise entrepreneurship C) Tactical entrepreneurship D) Strategic entrepreneurship E) Corporate entrepreneurship 32) ________ is the process of creating something new. C) Many seniors have extensive business experience and other qualities that equip them for an entrepreneurial career. and: A) Innovative firms B) Civil firms C) Salary-substitute firms D) Standard-of-living firms E) Statutory firms 6 . lifestyle firms. D) Nine out of ten businesses fail within the first four years. E) After four years. 15 percent of new businesses are still open. B) After four years. Jan Sims. interfaces with customers. uses its resources.34) GiftZip. Jan Sims. D) Entrepreneurs are motivated primarily by money. Pacific's founder. the company is located in the warehouse district of a large western city. C) Two out of three businesses fail within the first four years. A) Operations plan B) Contingency plan C) Business model D) Corporate plan E) Business plan 38) Pacific Printing LLC is a startup that is working on a new technology for the printing industry. 50 percent of new businesses are still open. dispel? A) Entrepreneurs should be young and energetic. From this description. not made. B) Entrepreneurs love the spotlight. 25 percent of new businesses are still open. makes money via: A) Monthly subscription fees B) Payments from companies that offer gift cards for displaying their cards on the site C) Online advertising D) Earning an affiliate fee for gift card purchases that originate from its site E) The direct sale of gift cards displayed on its site 35) Which of the following statements regarding business success (or failure) rates is correct? A) After four years. we can most accurately conclude that Apple has a high level of: A) Enterprise focus B) Innovative intensity C) Creative intensity D) Innovative concentration E) Entrepreneurial intensity 37) A(n) ________ is a written document that describes all the aspects of a business venture in a concise manner. the company profiled in the opening feature for Chapter 1. and creates value to sustain itself on the basis of the value it creates. 36) Apple Inc. A) Operations model B) Tactical model C) Business plan D) Strategic plan E) Business model 7 . innovative and risk-taking. rarely gives interviews. structures its relationships. C) Entrepreneurs are gamblers. 39) A firm's ________ is a plan for how it competes. E) Entrepreneurs are born. is a firm that is proactive. Which of the following common myths about entrepreneurs does the behavior of its founder. Because the technology it's working on is highly proprietary. and is careful to not divulge much about what the company is doing. creativity. D) Small businesses outperform their larger counterparts. inheriting money. B) The highest percentage of entrepreneurs falls in the 45 to 54 age range. 45) An event that prompts an individual to become an entrepreneur. E) Large businesses are not active in patent activity. from 1996 to 2010 is among entrepreneurs in the: A) 55 to 64 age range B) 35 to 44 age range C) 45 to 54 age range D) 19 years old and younger age range E) 20 to 34 age range 41) According to Chapter 1. is referred to as a(n): A) Prompting event B) Entrepreneurial prompt C) Triggering event D) Initiating event E) kick-off event 8 . A) Strength of the industry the new firm is entering B) Financial position of the new venture C) Strength of the entrepreneur D) Strength of the new venture's marketing plan E) Strength of the business idea 42) Chad and Allison Druxman launched a firm several years ago and have been particularly successful in introducing new products to the marketplace.40) According to the textbook. The ability to make this happen is most closely related to which of the following characteristics of successful entrepreneurs? A) Execution intelligence B) Passion for the business C) Tenacity despite failure D) Product/market focus E) A desire for recognition 43) Which of the following statement is correct regarding entrepreneurial activity and age ranges? A) The highest percentage of entrepreneurs falls in the 19 years old and younger age range. 44) In regard to patent activity (issuance). or accommodating a certain lifestyle. C) Small businesses and large businesses are relatively equal. B) Small businesses underperform their larger counterparts. E) The highest percentage of entrepreneurs falls in the 55+ age range. investors often cite the ________ as their most important criterion in the decision to fund new ventures. such as losing a job. the biggest jump in entrepreneurial activity. by age range. One thing that Chad and Allison are particularly good at is translating their thoughts. which of the following statements is correct? A) Small businesses are not active in patent activity. D) The highest percentage of entrepreneurs falls in the 20 to 34 age range. and imaginations into products that reach the marketplace. C) The highest percentage of entrepreneurs falls in the 35 to 44 age range. according to a Harris Interactive Survey. Kentucky Soup and Salad is an example of a(n): A) Quality-of-life firm B) Industry-standard firm C) Salary-substitute firm D) Entrepreneurial firm E) Lifestyle firm 48) Which of the following was not a contributing factor to Gift Zip’s early success? A) The gift card market was growing. seeks recognition. ________ said they'd like to start their own business someday. which individual has the most desirable mix of personal characteristics to become a successful entrepreneur? A) Candidate A: visionary. B) It was becoming increasingly affordable to launch an online business. networker E) Candidate E: tolerant for ambiguity. moderate risk taker B) Candidate B: seeks recognition. energetic. C) People were becoming increasingly comfortable buying online. creative C) Candidate C: visionary. 92% of Americans say entrepreneurs are critically important to job creation. E) Small businesses employ just less than half of all private sector employees. B) Small businesses are the creators of most new jobs. Based on the profiles. A) 10% B) 20% C) 30% D) 40% E) 50% 50) Suppose you are a Small Business Development Center counselor and you're looking at the personality profiles of five potential entrepreneurs. According to the textbook.46) Which of the following statements is incorrect regarding the economic impact of entrepreneurial firms in the United States? A) Small firms are providers of a significant share of the innovations that take place. 47) Kentucky Soup and Salad is a casual dining restaurant that has been owned by Kenneth Peterson for the past 11 years. achievement-motivated. motivated primarily by money 9 . The restaurant offers a menu that is typical for casual dining restaurants and affords Kenneth a level of income that is similar to what he would earn in a conventional job. energetic D) Candidate D: high risk taker. C) Small businesses outperform their larger counterparts in terms of patent activity. D) Positive PR E) Angel investor funding 49) At the high school and younger level. D) According to a Kauffman Foundation survey. high risk taker. self-starter. 53) Identify the three types of startup firms. Provide examples of each type of firm. and discuss how they differ. 52) Describe the three primary reasons that people become entrepreneurs and start their own firms. 54) What is entrepreneurship? What is the essence of entrepreneurial behavior? 55) Describe the four main characteristics of successful entrepreneurs. ANSWERS: 1) D 18) B 35) E 2) E 19) B 36) E 3) C 20) D 37) E 4) C 21) E 38) B 5) D 22) A 39) E 6) D 23) A 40) A 7) C 24) D 41) C 8) A 25) E 42) A 9) C 26) D 43) D 10) C 27) C 44) D 11) D 28) A 45) C 12) B 29) E 46) E 13) A 30) B 47) C 14) B 31) E 48) E 15) A 32) E 49) D 16) C 33) C 50) A 17) D 34) D 10 .Write your answer in the space provided or on a separate sheet of paper. 51) Identify and discuss the three primary reasons that entrepreneurial behavior has a strong impact on the United States economy.