1. Approximately 600,000 new businesses are launched in the U.S. each year by entrepreneurs.
a. True
b. False
2. The process of initiating a business venture, gathering and organizing the appropriate resources, and assuming the
associated risks and rewards refers to entrepreneurship.
a. True
b. False
3. Sole proprietorships are one of the fastest growing segment of small business.
a. True
b. False
4. Entrepreneurs in the sustainer category are rewarded by the personal satisfaction of being business owners.
a. True
b. False
5. Entrepreneurs in the sustainer category alike the chance to balance work and personal life and often don’t want the
business to grow too large.
a. True
b. False
6. Entrepreneurs in the optimizer category are rewarded by the personal satisfaction of being business owners.
a. True
b. False
7. Optimizers are rewarded by chance to work on something new and creative.
a. True
b. False
8. China is the most entrepreneurial country, with 24 percent of individuals age 18 to 64 starting a new business.
a. True
b. False
9. Small businesses, according to the Small Business Administration, employ more than 90 percent of the private
workforce in the United States.
a. True
b. False
10. Immigrants are more likely to start small businesses than native-born Americans.
a. True
b. False
11. Particularly in a turbulent environment, the three most important traits of successful entrepreneurs are realism,
flexibility, and passion.
a. True
b. False
12. The psychological characteristic that allows a person to be untroubled by disorder and uncertainty is called
tolerance for ambiguity.
a. True
b. False
13. A need to achieve is a psychological characteristic that means people are motivated to excell and pick situations in
which success is likely.
a. True
b. False
14. Social entrepreneurs have a primary goal of improving society rather than maximizing profits.
a. True
b. False
15. Social entrepreneurs are leaders who are committed to both good business and ensuring high profitability.
a. True
b. False
16. Social entrepreneurship combines the creativity, business smarts, passion, and hard work of the traditional
entrepreneur with a mission to change the world for the better.
a. True
b. False
17. The first step in pursuing an entrepreneurial dream is to come up with a viable idea.
a. True
b. False
18. The most common source of new business ideas comes from in–depth understanding of an industry or profession.
a. True
b. False
19. A document specifying the business details prepared by an entrepreneur prior to opening a new business is known
as a business plan.
a. True
b. False
20. A business plan for a small business should be detailed, encompassing at least 100 pages.
a. True
b. False
21. Since a corporation is a legal structure reserved for large firms, small businesses have two basic choices for legal
structure of their company: proprietorship and partnership.
a. True
b. False
22. A sole proprietorship an unincorporated business owned by two or more people.
a. True
b. False
23. The drawbacks of proprietorship include unlimited liability and difficulty in obtaining financing.
a. True
b. False
24. Two principle advantages of forming a corporation are continuity and limits on the owners’ liability.
a. True
b. False
25. The failure rate for high-tech business is lower than the failure rate for conventional businesses.
a. True
b. False
26. Borrowing from family and friends is a common source of debt financing for a start-up business.
a. True
b. False
27. Equity financing is when funds are invested in exchange for ownership in the company.
a. True
b. False
28. A venture capital firm is a group of companies or individuals that invests money in new or expanding businesses for
ownership and potential profits.
a. True
b. False
29. The advantage of buying an existing business is the ability to develop and design the business in the entrepreneur’s
own way.
a. True
b. False
30. An attractive innovation for entrepreneurs who want to start a business from scratch is to join a business incubator.
a. True
b. False
31. To succeed in the competitive online market, aspiring entrepreneurs need to identify a market niche that isn‘t being
served by other companies.
a. True
b. False
32. Entrepreneurs see themselves as being less in control of their environment, generally speaking, and can be expected
to have an external locus of control.
a. True
b. False
33. The first stage of growth for an entrepreneurial company is the investment stage.
a. True
b. False
34. At the success stage of growth, a company’s substantial financial gains may come at the cost of losing its
advantages of small size, including flexibility and the entrepreneurial spirit.
a. True
b. False
35. At Stage 3 of growth for an entrepreneurial firm, managers often are hired to take over duties performed by the
owner.
a. True
b. False
36. The takeoff stage is the last of the five stages of growth for an entrepreneurial company.
a. True
b. False
37. In the start-up stage of an entrepreneurial business, formal planning tends to be nonexistent except for the business
plan.
a. True
b. False
38. The owner should start implementing more structured control systems by Stage 3 of growth for an entrepreneurial
firm.
a. True
b. False
39. A domain name gives a company an address on the Web and a unique identity.
a. True
b. False
40. Which of the following is the process of starting a business venture, organizing the resources, and taking the risks?
a. Intrapreneurship
b. Entrepreneurship
c. Small business administration
d. Venture capital
e. Equity financing
41. A(n) is someone who recognizes a viable idea for a business product or service and carries it out.
a. intrapreneur
b. entrepreneur
c. manager
d. leader
e. introvert
42. Being interested in computers, Jose Cohata came up with an idea of personalizing the screen saver programs with
family pictures. After trying a couple of programs, Jose started marketing this service to neighbors and area
businesses. Jose’s activities can be described as a(n) .
a. entrepreneurship
b. intrapreneurship
c. useless idea
d. large business
e. partnership
43. An entrepreneur:
a. assumes the risks of the business.
b. reaps the rewards of the business.
c. assumes the financial and legal risks of ownership.
d. recognizes a viable idea for a business product or service and carries it out.
e. all of these.
44. Tracy‘s Trikes believes that each employee should enjoy the idea of working on something that is new, creative, or
personally meaningful. Tracy’s Trikes exemplifies which of the categories of small business owners?
a. Optimizers
b. Idealists
c. Hard workers
d. Sustainers
e. Jugglers
45. Connie, a single mother and home-business entrepreneur, enjoys running her own business. However, because she
is busy balancing work and family, she does not foresee her home business growing significantly in the near future.
Connie can best be described as what type of entrepreneur?
a. Idealist
b. Sustainer
c. Optimizer
d. Juggler
e. Hard worker
46. If a small business owner enjoys the chance to balance work and personal life, he would be considered a(n) .
a. idealist
b. optimizer
c. hard worker
d. juggler
e. sustainer
47. Which of the following are high–energy people who enjoy handling every detail of their own businesses?
a. Jugglers
b. Idealists
c. Sustainers
d. Optimizers
e. Hard workers
48. Today, inspired by the growth of companies such as Amazon.com, entrepreneurs are flocking to the to start
new businesses.
a. Small Business Administration
b. Internet
c. bookstore
d. mall
e. Internal Revenue Service
49. In 2012, which country had the largest percentage of individuals age 18 to 64 that were active in starting or
managing a business?
a. China
b. Peru
c. Columbia
d. Angola
e. Dominican Republic
50. The Small Business Association (SBA) reports that small businesses create at least percent of America’s
new jobs.
a. 30
b. 32
c. 46
d. 64
e. 82
51. Which of the following demographic factors distinguish entrepreneurs from others?
a. They are likely the youngest child in their family.
b. Most entrepreneurs launch their businesses between the ages of 35 and 55.
c. Their parents likely worked for large companies.
d. They are likely the children of immigrants.
e. All of these.
52. Celine has an unwavering belief in her new start-up company. She possesses intense focus and takes
unconventional risks to make her new company successful. These examples most closely relate to which
personality trait of entrepreneurs?
a. Need to achieve
b. Patience
c. Tolerance for ambiguity
d. High energy level
e. Self-confidence
53. Andrew, a young entrepreneur, feels sure about his ability to win customers through his people skills. He is
comfortable with his ability to handle technical details and feels that he is able to keep his business moving. This
most closely relates to which personality trait of entrepreneurs?
a. Need to achieve
b. Impatience
c. Tolerance for ambiguity
d. High energy level
e. Self-confidence