978-0134729534 Test Bank Chapter 01 Part 2

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40) According to Chapter 1, a sentiment that venture capitalists often express is that ________.

A) the strength of the entrepreneur and the strength of the business idea are of equal importance

B) they would never fund a strong entrepreneur with a weak business idea

C) they would rather fund a strong entrepreneur with a mediocre business idea than fund a strong

business idea with a mediocre entrepreneur

D) a new venture’s marketing plan is more important than either the strength of the entrepreneur

or the strength of the business idea

E) they would rather fund a strong business idea with a mediocre entrepreneur than fund a strong

entrepreneur with a mediocre business idea

41) Pacific Fishing LLC is a startup that is working on a new technology for the fishing industry.

Because the technology it’s working on is highly proprietary, the company is located in the

warehouse district of a large western city. Pacific’s founder, Ray Sims, rarely gives interviews

and is careful to not divulge much about what the company is doing. Which of the following

common myths about entrepreneurs does the behavior of its founder, Ray Sims, dispel?

A) Entrepreneurs are born, not made.

B) Entrepreneurs are gamblers.

C) Entrepreneurs are motivated primarily by money.

D) Entrepreneurs should be young and energetic.

E) Entrepreneurs love the spotlight.

42) According to the consensus of the research, some people are genetically predisposed to be

entrepreneurs.

43) Entrepreneurs are usually moderate, rather than high, risk-takers.

44) Entrepreneurs are motivated primarily by money.

45) According to the textbook, there are three types of startup firms: ________.

A) lifestyle firms, general firms, and entrepreneurial firms

B) standard-of-living firms, statutory firms, and general firms

C) entrepreneurial firms, standard-of-living firms, and statutory firms

D) lifestyle firms, salary-substitute firms, and entrepreneurial firms

E) innovative firms, entrepreneurial firms, and standard firms

46) Colorado Sandwich, Soup and Salad is a casual dining restaurant that has been owned by

Stephanie Peterson for the past 14 years. The restaurant offers a menu that is typical for casual

dining restaurants and affords Stephanie a level of income that is similar to what she would earn

in a conventional job. According to the textbook, Colorado Sandwich, Soup and Salad is an

example of a(n) ________ firm.

A) salary-substitute

B) entrepreneurial

C) quality-of-life

D) lifestyle

E) industry-standard

47) Montana Sky Trails leads multiday outdoor adventure trips for private groups and corporate

clients to various locations across Montana. The company was started by Justin Smith, an

individual that gave up a prestigious job in banking because Montana Sky Trails better

accommodates his personal lifestyle. Montana Sky Trails is an example of a(n) ________ firm.

A) entrepreneurial

B) salary-substitute

C) standard-of-living

D) statutory

E) lifestyle

48) Entrepreneurial firms ________.

A) are small firms that yield a level of income for their owner(s) that is similar to what they

would earn when working for an employer

B) bring to market new products and services that are not particularly innovative

C) offer to customers common products that are not particularly innovative, and provide their

owner(s) the opportunity to pursue a particular lifestyle and earn a living while doing so

D) provide their owner(s) the opportunity to pursue a particular lifestyle and earn a living while

doing so

E) bring new products and services to market by creating and seizing opportunities

49) According to the textbook, Dropbox, Facebook, and Uber are examples of ________ firms.

A) lifestyle

B) salary-substitute

C) industry-standard

D) entrepreneurial

E) standard-of-living

50) The Partnering for Success feature in Chapter 1 focuses on campus ambassador or campus

rep programs. According to the feature, which of the following is NOT a characteristic that such

programs typically look for in student hires?

A) Have upbeat personalities

B) Are effective communicators

C) Have a wide network of friends

D) Have effective marketing skills

E) Have in-depth knowledge and love for the product

51) In terms of the “types” of startup firms, entrepreneurial firms bring new products and

services to market.

52) Identify the three types of startup firms, and discuss how they differ. Provide examples of

each type of firm.

53) Which of the following statements is NOT true about women-owned businesses in the

United States?

A) The number of women-owned businesses is decreasing.

B) A total of 44 percent of women-owned businesses are owned by minorities.

C) In some industries, women own a significant share of the business.

D) The number of groups that support and advocate for women-owned businesses continues to

increase.

E) Over the past nine years, the number of women-owned businesses has grown at a rate five

times faster than the national average.

54) There has been ________ in the number of minority entrepreneurs in the United States over

the past several years.

A) a moderate increase

B) a substantial decrease

C) no meaningful change

D) a substantial increase

E) a moderate decrease

55) Which of the following was NOT given in the textbook as a reason for the increase in the

number of senior entrepreneurs?

A) Seniors tend to be more passionate about new business ideas than middle-aged or younger

prospective entrepreneurs.

B) Many seniors have extensive business experience and other qualities that equip them for an

entrepreneurial career.

C) Growing worries among seniors that they need to earn additional income to pay for future

health care services and other expenses

D) An increasing desire among older workers for more personal fulfillment in their lives.

E) Corporate downsizing

56) According to a Bentley University survey, ________ percent of millennials have a desire to

start their own business.

A) 11

B) 29

C) 36

D) 66

57) Over the past 10 years, the demographic makeup of entrepreneurial firms has remained fairly

stable in the United States and around the world.

58) Although interest in entrepreneurship remains high nationwide, the number of women-owned

businesses is decreasing.

59) Unfortunately, statistics show that there is very little interest in entrepreneurship among

young people in the United States.

60) 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) creative destruction

B) repetitive destruction

C) iterative replacement

D) inventive replacement

E) iterative destruction

61) In the book The Theory of Economic Development, ________ argued that entrepreneurs

develop new products and technologies that, over time, make current products and technologies

obsolete. This process is called creative destruction.

A) Malcolm Gladwell

B) Seth Godin

C) Joseph Schumpeter

D) Thomas Friedman

62) 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) a major impact on society and minor impact on the economy

D) a major impact on both the economy and society

E) no impact on either the economy or society

63) ________ is the process of creating something new, which is central to the entrepreneurial

process.

A) Creative destruction

B) Modernism

C) Execution

D) Creativity

E) Innovation

64) In regard to patent activity (issuance), which of the following statements is correct?

A) Small businesses outperform their larger counterparts.

B) Small businesses underperform their larger counterparts.

C) Small businesses and large businesses are relatively equal.

D) Small businesses are not active in patent activity.

E) Large businesses are not active in patent activity.

65) Joseph Schumpeter argued that entrepreneurs develop new products and technologies that

over time make current products and technologies obsolete, and this process, which he called

creative destruction, is good because it stimulates economic activity.

66) Innovation is the process of creating something new, which is central to the entrepreneurial

67) Small businesses outperform their larger counterparts in terms of patent activity (issuance).

68) Identify and discuss the three primary reasons that entrepreneurial behavior has a strong

impact on the United States economy.

69) Which of the following is the correct sequence for the four steps in the entrepreneurial

process?

A) Deciding to become an entrepreneur, developing successful business ideas, moving from an

idea to an entrepreneurial firm, managing the growing entrepreneurial firm

B) Developing successful business ideas, deciding to become an entrepreneur, moving from an

idea to an entrepreneurial firm, managing and growing the entrepreneurial firm

C) Developing successful business ideas, moving from an idea to an entrepreneurial firm,

deciding to become an entrepreneur, managing and growing the entrepreneurial firm

D) Deciding to become an entrepreneur, moving from an idea to an entrepreneurial firm,

developing successful business ideas, managing and growing the entrepreneurial firm

E) Managing and growing the entrepreneurial firm, developing successful business ideas,

deciding to become an entrepreneur, moving from an idea to an entrepreneurial firm

70) Which of the following is NOT one of the four steps of the entrepreneurial process?

A) Deciding to become an entrepreneur

B) Determining how to seize the spotlight

C) Developing successful business ideas

D) Moving from an idea to an entrepreneurial firm

E) Managing and growing the entrepreneurial firm

71) An event that prompts an individual to become an entrepreneur, such as losing a job,

inheriting money, or accommodating a certain lifestyle, is referred to as a(n) ________.

A) prompting event

B) entrepreneurial prompt

C) initiating event

D) triggering event

E) kick-off event

72) Jan Berry recently received a $500,000 inheritance from her maternal grandmother. Jan

decided to use the money to start a business. According to the textbook, the inheritance that Jan

received was the ________ that prompted her to start a business.

A) prompting event

B) entrepreneurial prompt

C) initiating event

D) triggering event

E) kick-off event

73) A(n) ________ is a written document that describes all the aspects of a business venture in a

concise manner.

A) business plan

B) business model

C) operations plan

D) corporate plan

E) contingency plan

74) A firm’s ________ is a plan for how it competes, uses its resources, structures its

relationships, interfaces with customers, and creates value to sustain itself on the basis of the

value it creates.

A) business plan

B) business model

C) tactical model

D) strategic plan

E) operations model

75) The entrepreneurial process consists of four steps: deciding to become an entrepreneur,

developing successful business ideas, moving from an idea to an entrepreneurial firm, and

divesting or selling the entrepreneurial firm.