Entrepreneurship and Small Business Management, 2e (Mariotti)
Chapter 1 Entrepreneurs Recognize Opportunities
1) Based on the idea of cost and benefits, which of the following activities is most beneficial?
A) Playing video games
B) Watching a PBS special about nature
C) Seeing a speaker you admire and want to mentor you
D) Going to a movie with your favorite actor/actress
E) Hanging out with friends
Learning Obj.: LO 2
AACSB: Analytical thinking
2) Which of the following could be considered an acquisition?
A) Inheriting your father’s business
B) Building a new restaurant
C) Inventing a new product and selling it
D) Starting a recycling business
E) Buying a business from a retiring owner
Learning Obj.: LO 3
AACSB: Application of knowledge
3) Which is not part of Schumpeter’s definition regarding the ways that entrepreneurs find
opportunities to create new businesses?
A) Use a new technology to produce a new product
B) Use an existing technology to produce a new product
C) Use an existing technology to produce an old product in a new way
D) Find a new source of resources
E) Find a new market for a new product
Learning Obj.: LO 3
AACSB: Analytical thinking
4) Which of the following could not be considered opportunity costs?
A) Time
B) Energy
C) Money
D) Entertainment
E) All of the above can be considered opportunity costs.
Learning Obj.: LO 2
AACSB: Analytical thinking
1
5) A(n) ________ is a legal and commercial relationship between the owner of a trademark,
service mark, trade name or advertising symbol and an individual or group seeking to use that
identification in a business.
A) Franchise
B) License
C) Acquisition
D) Merger
E) Opportunity
Learning Obj.: LO 3
AACSB: Application of knowledge
6) Gregory Dee’s definition of social entrepreneurship states, “Social entrepreneurs play the role
of change agents in the social sector by ________.”
A) Adopting a mission to create and sustain social value
B) Serving a higher power
C) Not being concerned with profit or sustainability
D) Avoiding competition
E) Being concerned with mother earth
Learning Obj.: LO 2
AACSB: Analytical thinking
7) How does the public reward entrepreneurs who use resources efficiently to satisfy consumer
needs?
A) With profit
B) With awards
C) With praise
D) With applause
E) With a pat on the back
Learning Obj.: LO 4
AACSB: Reflective thinking
8) Which of the following is not an economic question listed in the text?
A) What should be produced?
B) How much will it cost to be produced?
C) When will it be produced?
D) Who will produce it?
E) Who gets to have what is produced?
Learning Obj.: LO 1
AACSB: Analytical thinking
2
9) The text defines profit as ________.
A) A positive gain from operations after all expenses are subtracted
B) A positive gain from operations before all expenses are subtracted
C) A positive gain from operations after fixed expenses are subtracted
D) A negative loss from operations after all expenses are subtracted
E) None of the above
Learning Obj.: LO 3
AACSB: Application of knowledge
10) Entrepreneurship options include ________.
A) Opportunities that are virtually limitless
B) For-profit ventures only
C) Not-for-profit organizations only
D) Only green business options
E) Only new technology and inventions
Learning Obj.: LO 2
AACSB: Analytical thinking
11) Which of the following represents a “change” associated with the “five roots of opportunity”
explored in the text?
A) The invention of the cell phone
B) Expanded completion within an industry
C) The entry of a new competitor
D) Development of the technology for social networking
E) The green movement and society’s new concern with recycling
Learning Obj.: LO 3
AACSB: Analytical thinking
12) Which of the following is not a way to identify business opportunity as discussed in the text?
A) Exploiting changes in the world
B) Seeing opportunity where others see problems
C) Training your mind to recognize opportunity
D) Using your imagination
E) Seeing what is wrong, but not a way to fix it
Learning Obj.: LO 3
AACSB: Analytical thinking
3
13) All of the following are components of control over compensation except ________.
A) Salary
B) Wage
C) Dividend
D) Commission
E) All of the above are components of control over compensation.
Learning Obj.: LO 2
AACSB: Application of knowledge
14) According to the text, which of the following is not a cost of becoming an entrepreneur?
A) Contribution to society
B) Business failure
C) Obstacles
D) Loneliness
E) Long Hours
Learning Obj.: LO 2
AACSB: Analytical thinking
15) Management expert Peter Drucker pointed out that, for a business to be considered
entrepreneurial, it should exploit changes in the world. Which of the following areas have
changes that entrepreneurs could exploit?
A) Technology
B) Politics
C) Socio-economics
D) All of the above
E) None of the above
Learning Obj.: LO 3
AACSB: Reflective thinking
16) Jumpstarting your imagination about entrepreneurial opportunity can be done by asking
yourself and others questions like ________.
A) What is the one thing you would love to have more than anything else?
B) What would it look like?
C) What would it do?
D) What problem have you encountered in everyday life and thought, “There has to be a better
way to do this”?
E) All of the above
Learning Obj.: LO 3
AACSB: Analytical thinking
4
17) Jeffry Timmons’ view on the qualities of opportunity includes all of the following except
________.
A) Attractive
B) Durable
C) Timely
D) None of the above
E) All of the above
Learning Obj.: LO 3
AACSB: Analytical thinking
18) Which of the following is a typical characteristic of microenterprises?
A) Annual growth rate over 20%
B) Require large amount of outside financial support
C) Permit their owners to follow a desired pattern of living
D) Constitute the bulk of the small businesses
E) Usually have 5 or fewer employees
Learning Obj.: LO 3
AACSB: Application of knowledge
19) Which of the following would be part of a product-uniqueness strategy?
A) Offering a low cost to the customer
B) Offering a one-of-a-kind product or service
C) Cutting operations costs
D) Limiting the salaries of employees
E) All of the above
Learning Obj.: LO 3
AACSB: Analytical thinking
20) Which of the following is not a tangible product?
A) Dining room set
B) A pound of chicken
C) A new car
D) Computer repair
E) Windows for your home
Learning Obj.: LO 1
AACSB: Analytical thinking
5
21) Roddick suggested that you develop your entrepreneurial instincts by asking yourself all of
the following questions below except ________.
A) What frustrates me the most when I try to buy something?
B) What product or service would really make my life better?
C) What makes me annoyed or angry?
D) What product or service would take away my aggravation?
E) What is a product that has no flaws?
Learning Obj.: LO 3
AACSB: Analytical thinking
22) Which of the following is a “problem” that an entrepreneur can address?
A) A toy that does not meet the expectations of customers
B) Legal changes
C) A new computer processing technology
D) Renewed competition in an industry
E) All of the above
Learning Obj.: LO 3
AACSB: Analytical thinking
23) A savvy entrepreneur should not ________.
A) Rely mainly on making mistakes for themselves and learning from them
B) Learn from the mistakes of others
C) Appreciate the wisdom and experience of trusted advisors and mentors
D) Carefully plan and prepare to avoid mistakes
E) All of the above
Learning Obj.: LO 2
AACSB: Reflective thinking
24) Which of the following is not part of a SWOT analysis?
A) Strengths
B) Weaknesses
C) Opposition
D) Threats
E) All of the above are parts of the SWOT analysis.
Learning Obj.: LO 3
AACSB: Analytical thinking
6