Essentials of Entrepreneurship & Small Business

Essentials of Entrepreneurship & Small Business Mgmt., 7e(Scarborough)

Chapter 1 The Foundations of Entrepreneurship

1) One of the most significant economic developments in recent business history relates to the:

A) growth of blue-chip corporations.

B) development of Pacific Rim countries.

C) entrepreneurial spirit.

D) additional employment opportunities offered by government institutions.


2) The recent number of job losses in large corporations compared to the jobs created by small business has changed the perception of ________ for launching a new business.

A) prestige

B) risk

C) financing opportunities

D) short-term potential

3) The profile of an entrepreneur includes:

A) a desire for responsibility and moderate risk.

B) confidence in the ability to succeed and determination.

C) a high level of energy, a desire for immediate feedback and a future orientation.

D) All the above

4) An entrepreneur is one who:

A) is willing to attempt to implement a business concept and then give up if it does not meet immediate expectations.

B) understands the process of developing an idea and does not need to understand what it means to bring that idea to a viable business concept.

C) knows that the concept they are about to develop will result in a profitable business.

D) creates a new business concept for the purpose of achieving profit and growth by assembling the necessary resources to capitalize on identified opportunities.

5) All of the following are characteristics of the typical entrepreneur except:

A) confidence in his/her ability to succeed.

B) value of money over achievement.

C) desire for immediate feedback.

D) a future orientation.

6) Entrepreneurs are characterized by:

A) skill at organizing.

B) desire for immediate feedback.

C) high energy levels.

D) All of the above

7) Entrepreneurs who repeatedly start businesses and grow to a sustainable size before striking out again are known as ________ entrepreneurs.

A) opportunistic

B) persistent

C) serial

D) classic

8) Entrepreneurs typically possess:

A) the ability to easily access capital.

B) a set of unique skills that is usually accompanied by advanced degrees in several areas.

C) a high level of commitment, have a tolerance for ambiguity, are flexible and tenacious.

D) specialized technical abilities.


9) Entrepreneurs who start businesses because they cannot find work any other way are:

A) necessity entrepreneurs.

B) serial entrepreneurs.

C) opportunity entrepreneurs.

D) corporate cast-offs.

10) In addition to the opportunity to create their own destiny and enjoy what they do, entrepreneurs also benefit from the ability to:

A) earn tremendous wealth without risk and uncertainty.

B) make a difference in an area important to them and be recognized for those efforts.

C) create wealth without providing true value.

D) exploit the opportunities that the free enterprise system offers.

11) In a large organization, an individual may be stifled and limited by a wide variety of factors. However, by owning one’s own business, the only limits are one’s own creativity, talent, and determination. In this sense, small business ownership offers the advantage of the:

A) opportunity to reach one’s full potential.

B) opportunity to reap unlimited profits.

C) chance to learn from other’s mistakes.

D) ability to accumulate certain wealth.

12) Which of the following is a benefit of entrepreneurship?

A) The opportunity to gain control over your own destiny.

B) The opportunity to reach your full potential.

C) The opportunity to do what you enjoy.

D) All of the above


13) Potential drawbacks of entrepreneurship may include:

A) uncertainty of income, risk, long hours, and high stress.

B) uncertainty of income, risk, easy hours, and frequent vacations.

C) uncertainty of income, risk, long hours, and the immediate accumulation of wealth.

D) certainty of income, risk, long hours, and high stress.

14) It is estimated that ________ percent of new businesses fail within two years, while ________ percent fail within five years.

A) 31; 51

B) 51; 64

C) 35; 41

D) 51; 31

15) Within five years, ________ percent of new businesses will fail.

A) 31

B) 45

C) 51

D) 65

16) The majority of new business owners work:

A) fewer than 40 hours per week.

B) more than 40 hours per week.

C) more than 70 hours per week.

D) more than 80 hours per week.


17) Nearly ________ of entrepreneurs start their businesses between the ages of 25 and 44 and the number of Americans in that age range currently is ________ .

A) one-half; 8.5 million

B) two-thirds; 85,000

C) two-thirds; 85 million

D) on-fourth; 85 million

18) Factors that feed the economic boom behind entrepreneurship include:

A) demographic and economic factors.

B) technology and cloud computing.

C) the shift to a service-based economy and international opportunities.

D) All of the above

19) Which of the following is NOT one of the forces driving the entrepreneurial trend in our country?

A) Shift away from a service economy

B) Independent lifestyle

C) International opportunities

D) E-commerce and the World Wide Web

20) Which of the following technological forces is driving the entrepreneurial trend in our nation?

A) Cloud computing

B) E-commerce

C) Technological advancements

D) All of the above


21) Entrepreneurs may find benefit from the Internet due to its potential:

A) if the organization is willing to invest millions of dollars in this effort.

B) only if the entrepreneur has a high level of technical abilities.

C) as a relatively low-cost solution to expand its revenue-generating abilities.

D) to take all pressure off other attributes of the business venture.

22) International opportunities are:

A) clearly out of reach for entrepreneurial businesses.

B) now within the reach of entrepreneurial businesses and may present significant opportunities.

C) highly limited for entrepreneurs.

D) risky and do not merit serious consideration by the entrepreneur.

23) Which of the following statements concerning small businesses and international markets is false?

A) Although terrorism and global recession have slowed the growth of international trade somewhat, global opportunities for small businesses have a long-term positive outlook.

B) Although the U.S. is an attractive market, approximately 95 percent of the world’s population lives outside its borders.

C) Because exporting is so complex and requires a company to have so many international experts on staff, exporting is not feasible for small businesses.

D) Small companies comprise 97 percent of all businesses engaged in exporting, yet they account for only 30 percent of the nation’s export sales.

24) Small companies that operate globally from their inception are referred to as:

A) micromultinationals.

B) intrapreneurial ventures.

C) global companies.

D) international companies.


25) Small companies that have expanded successfully into foreign markets tend to rely on all but which of the following strategies?

A) Research foreign markets thoroughly.

B) Focus on many countries initially.

C) Utilize government resources designed to help small companies establish an international presence.

D) Forge alliances with local partners.

26) Entrepreneurial couples who work together as co-owners of their business are referred to as:

A) dual entrepreneurs.

B) corporate dropouts.

C) corporate cast-offs.

D) copreneurs.

27) Women in business still experience ________ as they attempt to break the “glass ceiling.”

A) success

B) opportunities

C) discrimination

D) ease of navigation

28) The demographic attributes of successful entrepreneurs are:

A) limited to specific ages, genders, and ethnic backgrounds.

B) uncertain and have not been fully studied or analyzed.

C) are key predictors that determine how long the business will survive.

D) highly diverse relating to age, gender, and ethnicity.


29) Which of the following statements is not true regarding the diversity of entrepreneurs?

A) Minority-owned businesses have come a long way in the past decade, and their success rate is climbing.

B) Minority-owned businesses now account for approximately 22 percent of all businesses in the U.S.

C) Immigrants with more education and experience than those of the past are coming to the U.S. and succeeding in entrepreneurial ventures.

D) The numbers of part-time and home-based entrepreneurs are rising.

30) Which of the following statements about women-owned businesses is false?

A) The businesses women start tend to be smaller than those men start.

B) Women own about 28 percent of all privately held businesses in the U.S.

C) The survival rate of women-owned businesses is much lower than that of U.S. businesses overall.

D) Most women-owned companies are concentrated in retailing and services.