Chapter 06 – Entrepreneurship and Starting a Small Business
156. Because college students realize the importance of nursing homes for our aging
population, students comprise an attractive market for nursing home insurance policies.
Feedback: A market consists of people who have both a willingness to buy and the financial
resources needed to make the purchase. College students may lack both of these attributes.
157. In order to better serve their customers, small business owners should avoid delegating
authority to their employees.
Feedback: Successful small businesses often grow beyond the ability of the entrepreneur.
Empowering employees produces highly motivated workers with higher job satisfaction. This
helps to improve customer service and reduces the wear and tear on the owner-manager.
158. Justin feels that his family-run business will be more likely to avoid the problems
many growing businesses have with managing employees. His attitude will likely hinder
the growth of his company.
Feedback: Attitudes such as “You can’t fire family” or you must promote someone because
“they’re family” can be detrimental to family businesses.
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163. Due in part to government support, the majority of U.S. small businesses are involved
in exporting.
164. Exporting offers small businesses opportunities to reduce their dependence on
domestic sales and extend product lives.
165. Small Business Administration loans help firms finance their domestic operations.
These funds however, cannot be used to finance exports since the money is provided by
U.S. taxpayers.
166. Small businesses can provide more personalized service than a large corporation to
overseas customers.
167.
Chapter 06 – Entrepreneurship and Starting a Small Business
The Internet has slowed small businesses participation in international markets.
168. As the owner of a small manufacturing business, Myles has an interest in exporting.
However, he doesn’t know how to get started. Fortunately, the government provides an
abundance of information to encourage entrepreneurs like Myles.
Feedback: The Commerce Department’s Bureau of Industry and Security and the Small
Business Administration provide export information on the Internet.
169. From a competitive standpoint, small businesses cannot expect to successfully
compete with large corporations in international markets.
Feedback: Small businesses have certain advantages over larger rivals in international
markets. Overseas buyers often prefer to deal with individuals rather than corporate
bureaucracies. Moreover, small businesses can often begin shipping faster and offer more
personal service.
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171. Entrepreneurship is:
A. managing businesses for others.
B. a controlling interest in the ownership of a corporation.
C. managing businesses that operate in multiple countries.
D. accepting the risk of starting and running a business.
172. Which of the following U.S. issues does entrepreneurship most directly affect?
A. The political process
B. The ability to create jobs for others
C. Contributions of money to organizations that help people in need
D. The ability to influence national macroeconomics polices
173. Which of the following explains why individuals accept the risks of business
ownership?
A. The potential for learning how to be self-disciplined
B. The sense of self-satisfaction and independence
C. The challenge of seeking power
D. The desire to work fewer hours
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174. Which of the following is a characteristic of successful entrepreneurs?
A. Power-seeking
B. Relies heavily on others who believe in the business
C. Willingness and desire to follow others
D. Action-oriented
175. Which of the following best describes entrepreneurial personality traits?
A. Tolerant of uncertainty and highly energetic.
B. Risk averse and self-nurturing.
C. Appreciate direction from others and risk averse.
D. Prefer to work less hours and prefer to give directions and let others do the foot work.
176. A(n) ________________ is a group of experienced professionals from different areas
of business who join together to develop, make, and market a new product.
A. entrepreneurial team
B. joint venture
C. self-directed functional team
D. managerial task force
177.
Chapter 06 – Entrepreneurship and Starting a Small Business
An entrepreneurial team consists of:
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.
178. Business owners who prefer to maintain their businesses at a manageable size are
called:
A. macropreneurs
B. intrapreneurs
C. micropreneurs
D. home workers
179. One of the challenges of running a home-based business is:
A. an increase in business risk.
B. managing the extra time on your hands.
C. keeping work and family tasks separate.
D. burdensome tax laws.
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188. Successful entrepreneurs are self-nurturing. This means they:
A. look to others for strength and encouragement.
B. self-finance their business with no assistance from others.
C. perform all business operations by themselves.
D. believe in themselves and their ideas.
Feedback: Self-nurturing individuals have the ability to believe in an idea when no one else
does, and to replenish their enthusiasm.
189. Which of the following statements is characteristic of entrepreneurs?
A. They like certainty
B. They have the ability to visualize a clear path
C. They look at problems and see opportunities
D. They prefer to be inventive rather than worry about whether the invention solves a
customer need
Feedback: A common characteristic of entrepreneurs is that they like to solve problems. They
view a problem or a need as an opportunity.
190.
Chapter 06 – Entrepreneurship and Starting a Small Business
Although successful entrepreneurs are more tolerant of uncertainty,
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.
Feedback: Although tolerant of uncertainty, successful entrepreneurs prefer to take calculated
risks. This means that they will explore environmental trends, and do their best to quantify
opportunities before taking chances.
191. Effective entrepreneurial teams combine:
A. creativity with marketing and production experience.
B. venture financing, tax benefits, and production economies.
C. scientific abilities, capital investment, and marketing skills.
D. risk tolerance, debt financing, and international experience.
Feedback: The purpose of an entrepreneurial team is to bring together the skills needed to
create, produce, and market a new product.
192. Successful entrepreneurial teams:
A. quickly organize themselves like large corporations.
B. assign only one person to new product innovation.
C. bring a variety of talent to the business venture.
D. outsource most of the details of innovation.
Feedback: As its name implies, members of an entrepreneurial team operate as a team.
Everyone works together to conceive, develop, and market the product. Team members can
combine their talents and creative skills, and bring a variety of expertise to the team.
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193. One reason we have seen continued growth in home-based businesses is:
A. the location offers a more secure operational environment.
B. affordable computer and information 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.
Feedback: Computer technology and information technology have helped level the playing
field between large and small businesses. Entrepreneurs can now use affordable technology
such as the Internet and PDA’s, right at home.
194.
Chapter 06 – Entrepreneurship and Starting a Small Business
Which of the following statements is not a challenge for home-based businesses?
A. Affordable technology such as the Internet
B. Staying focused on the business and leaving home chores for after-business hours
C. Using your time wisely
D. Promoting your services
Feedback: Computer technology and information technology have helped level the playing
field between large and small businesses. Entrepreneurs can now use affordable technology
such as the Internet and PDA’s, right at home.
195. Affiliate marketing is a web-based business strategy that:
A. relies on customers that enter the sites of large companies such as GAP™ and Nike™.
B. asks you to offer the names and emails of ten of your friends who may be interested in
the products or services the web-site is selling.
C. is currently illegal, but difficult to stop.
D. Rewards individuals who are willing to link a company’s website to their blog or social
network page.
Feedback: Affiliate marketing is an Internet-based marketing strategy where a business
rewards individuals for each visitor or customer the affiliate sends to its website. The affiliate
gives the business permission to plant a widget on the affiliate’s blog or social network Page.
If a sale is created, the affiliate receives a commission on the sale.
