54. Which of these means that people are motivated to excel and pick situations in which success is likely?
a. External locus of control
b. Tolerance for Ambiguity
c. Awareness of passing time
d. Internal locus of control
e. Need to achieve
55. Ginger likes to set her own goals, which have an intermediate level of difficulty. Which of the entrepreneurial
characteristics does she probably possess?
a. A high need for achievement
b. A high need for power
c. An external locus of control
d. An inability to deal with uncertainty
e. Intolerance for ambiguity
56. Melissa is a very good middle manager. However, she has long wanted to open her own business. Which of
Melissa’s characteristics is not consistent with entrepreneurship?
a. Melissa has high self-confidence.
b. Melissa tends to put things off till later.
c. She is untroubled by uncertainty.
d. She has a high energy level.
e. She has high need to achieve.
57. Which of the following is the psychological characteristic that allows a person to be untroubled by disorder and
uncertainty?
a. Tolerance for ambiguity
b. External locus of control
c. Need to achieve
d. Awareness of passing time
e. Internal locus of control
58. Social entrepreneurs are committed to both good business and:
a. swaying political opinion of consumers.
b. improving the natural environment.
c. positive social change.
d. non–profit goals.
e. big profits.
59. What is the primary goal of the social entrepreneur?
a. Maximizing profits
b. Improving society
c. Reaching social circles
d. Finding funding
e. Writing grants
60. combines creativity, business smarts, passion, and hard work of the traditional entrepreneur with a mission
to change the world for better.
a. Contemporary entrepreneurship
b. Traditional entrepreneurship
c. Modern-day entrepreneurship
d. Social entrepreneurship
e. Conventional entrepreneurship
61. One of the first characteristics or points of a successful business plan is:
a. a profile of potential customers and market needs.
b. demonstrate a clear, compelling vision that creates an air of excitement.
c. the key ingredient of the business that will attract million of customers.
d. the entrepreneur‘s background and role in the company.
e. essential information about funding received so far.
62. Which of the following is the most cited source of new business ideas?
a. Brainstorming
b. In-depth understanding of industry/profession
c. A hobby
d. Copying someone else
e. None of these
63. Before opening his own business, Kareem was writing a report that details the specifics of his ideas and future
business operations. This document is known as a:
a. SWOT analysis.
b. business portfolio.
c. business plan.
d. competitive analysis.
e. mission statement.
64. The most common reason for becoming an entrepreneur is:
a. joining the family business.
b. to control one’s future.
c. to be one’s own boss.
d. to fulfill a dream.
e. the result of being laid off.
65. Which of these refers to an unincorporated business owned by an individual for profit?
a. Partnership
b. Sole proprietorship
c. Corporation
d. Association
e. Trade alliance
66. Which of the following is NOT an appropriate legal structure for an entrepreneurial company?
a. Proprietorship
b. Corporation
c. Partnership
d. Trade alliance
e. All of these are appropriate legal structures for an entrepreneurial company.
67. Which of the following is a popular small business form because it is easy to start and has few legal requirements?
a. A partnership
b. A proprietorship
c. A corporation
d. An association
e. A trade alliance
68. Vaughn Hager started his one-man consulting business under the name Hager Associates. The legal structure for
the company can best be described as a(n):
a. proprietorship.
b. partnership.
c. trade alliance.
d. corporation.
e. one man operation.
69. A(n) has a legal life of its own.
a. partnership
b. proprietorship
c. corporation
d. association
e. trade alliance
70. The drawback(s) of proprietorship include:
a. the unlimited liability of the partners.
b. conflicts with partners.
c. existence regardless of whether the owners live or dies.
d. difficulty in obtaining financing.
e. complexity and cost.
71. Blake, Madison and Sean started selling computer software on college campuses under the name Student Software
Company. Each person contributed $1500 toward start-up costs and agreed on dividing costs and profits equally.
The legal structure for the company can best be described as:
a. a proprietorship.
b. a partnership.
c. a trade alliance.
d. a corporation.
e. none of these.
72. Which of the following is an unincorporated business owned by two or more?
a. A partnership
b. A proprietorship
c. A corporation
d. An association
e. A trade alliance
73. An artificial entity created by the state and existing apart from its owners is known as:
a. a partnership.
b. a proprietorship.
c. a corporation.
d. an association.
e. a trade alliance.
74. What are the two principal advantages of forming a corporation?
a. Unlimited liability and potential conflicts with partners
b. Freedom from debt and relatively simple structure
c. Continuity and limits on owner‘s liability
d. Unlimited liability and continuity
e. Continuity and non–tax structure
75. What is the most common way that entrepreneurs finance the start-up of a new business?
a. Self-financing from savings or credit cards
b. Loans from friends, family, or business associates
c. Bank loans
d. Lines of credit
e. Venture capital
76. refers to borrowing money that has to be repaid in order to start a business.
a. Venture capital
b. Debt financing
c. Equity financing
d. Franchising
e. Licensing
77. A group of companies or individuals that invests money in new or expanding businesses for ownership and potential
profits is known as:
a. an equity financing firm.
b. franchising.
c. a venture capital firm.
d. a corporation.
e. a trade alliance.
78. A venture capital firm wants to invest in businesses with a high rate of return. In return, they will:
a. invest large amounts of money.
b. provide necessary assistance and advice.
c. provide information to help the entrepreneur prosper.
d. all of these.
e. provide necessary assistance and advice and provide information to help the entrepreneur prosper only.
79. Which of these refers to the financing that consists of funds that are invested in exchange for ownership in the
company?
a. Venture-debt
b. Debt financing
c. Equity financing
d. Franchising
e. Licensing
80. Wendy enjoys making crafts and giving these away as gifts to friends and family. One day, she decided to quit her
job and make crafts full-time, selling them on her new company Web site. Which tactic of becoming a business
owner did Wendy use?
a. Equity financing
b. New business start-up
c. Buying an existing business
d. Buying a franchise
e. Merger and acquisition
81. Which of these offers the advantage that the entrepreneur has the ability to develop and design the business in the
entrepreneur’s own way?
a. Participate in a business incubator
b. Start a new business
c. Buy a franchise
d. Buy an existing business
e. All of these
82. An advantage of which of these tactics is that there is a shorter start-up time and an existing track record?
a. Participate in a business incubator
b. Start a new business
c. Buy a franchise
d. Buy an existing business
e. Debt financing
83. refers to an arrangement by which the owner of a product or service allows others to purchase the right to
distribute the product or service with help from the owner.
a. Franchising
b. Business incubation
c. Spinning–off
d. Globalization
e. Right offerings
84. was one of the top 10 fastest-growing franchises in 2011.
a. Arby’s
b. Krispy Kreme
c. Subway
d. Wendy’s
e. Dairy Queen
85. Which of these is true about the business incubator?
a. It gives up control since every business is run the same way.
b. It provides shared office space, management support services, and management advice.
c. It develops an international business.
d. It provides an established name and advertising.
e. All of these.
86. The majority of the incubators are operated by:
a. large corporations.
b. non–profit organizations.
c. small businesses.
d. international businesses.
e. college drop-outs.
87. Entrepreneurs who aspire to start online businesses implement all the following steps except:
a. create a professional Web site.
b. choose a domain name.
c. build online relationships
d. determine physical location.
e. identify a profitable market niche.
88. Max is the Web site manager for a local florist. The company’s owner would like Max to redesign the Web site so
that customers can connect directly with florist employees on a daily basis about products and specials. This relates
to which step in establishing an online business?
a. Finding a niche market
b. Creating a professional Web site
c. Choosing a target market
d. Choosing a domain name
e. Building online relationships
89. Marion is an entrepreneur. At this stage of his company’s growth, his main concerns are do we have enough
customers and money. What stage of growth is Marion‘s company in?
a. Start-up
b. Survival
c. Takeoff
d. Resource maturity
e. Success