A ________ is a place within a market segment that represents a narrower group of
customers with similar interests.
A) position market
B) niche market
C) slot market
D) spot market
E) gap market
Answer:
If a new venture organizes as a corporation, it is legally required to have a(n) ________,
which is a panel of individuals who are elected by a corporation’s shareholders to
oversee the management of the firm.
A) board of advisors
B) review team
C) team of advisors
D) accountability panel
E) board of directors
Answer:
Efforts to establish and maintain a company’s image with the public are referred to as:
A) open relations
B) public relations
C) civic relations
D) community relations
E) advertising
Answer:
The document that consummates the sale of a franchise is called the:
A) Franchise Disclosure Document
B) franchise agreement
C) license agreement
D) Uniform Franchise Licensing Code
E) franchise circular
Answer:
The ________ is a form of business organization that is rapidly gaining popularity in
the United States. The concept originated in Germany and was first introduced in the
United States in the state of Wyoming.
A) limited partnership
B) general partnership
C) limited liability company
D) subchapter S corporation
E) C corporation
Answer:
________ takes place when one party engages in the unauthorized use of another
party’s patent.
A) Patent breach
B) Patent encroachment
C) Patent violation
D) Patent infraction
E) Patent infringement
Answer:
Before Kim Green opened her jiffy print store, she processed several large print jobs for
local merchants for free, to demonstrate the quality of her service and to solicit
feedback. Two of the merchants wrote favorable reviews of Kim’s service, and agreed
to let Kim post the reviews on her company’s Web site. The companies that wrote the
favorable reviews are referred to as:
A) appreciation reports
B) acknowledgement accounts
C) referent accounts
D) tribute reports
E) approval reports
Answer:
The template for completing a feasibility analysis included in Appendix 3.1 of the book
is called the ________ analysis.
A) First Evaluation
B) Initial Screen
C) First Pass
D) First Screen
E) Flash Screen
Answer:
Hulu.com allows people to watch television shows and movies on the Internet.
Hulu.com’s business opportunity was made possible by ________ that enhanced the
ability of television shows and movies to be uploaded to the Internet and played by
anyone with a suitable computer and an Internet connection.
A) social forces
B) technological advances
C) legal changes
D) regulatory changes
E) economic forces
Answer:
A brief carefully constructed statement that outlines the merits of a business opportunity
is called a(n):
A) subway speech
B) sway speech
C) bootstrap speech
D) teaser speech
E) elevator speech
Answer:
Copyright law is governed by the:
A) U.S. Constitution
B) the 1946 Intellectual Property Act
C) the 1966 Trademark and Copyright Act
D) the 1955 Inventors and Writer’s Protection Act
E) Copyright Revision Act of 1976
Answer:
A(n) ________ seeks to increase the sales of a product or service through greater
marketing efforts or through increased production capacity and efficiency.
A) product line extension strategy
B) strategic alliance strategy
C) geographic expansion strategy
D) market penetration strategy
E) improving an existing product or service strategy
Answer:
What section of the business plan deals with the day-to-day operations of a company?
A) financial plan
B) marketing plan
C) operations plan
D) industry analysis
E) executive summary
Answer:
The information that is gathered by a firm to learn about its competitors is referred to
as:
A) a feasibility appraisal
B) a workable appraisal
C) a practical assessment
D) a viable assessment
E) competitive intelligence
Answer:
________ means that as a firm grows and adds personnel, the new hires typically do not
have the same ownership incentives as the original founders, so the new hires may not
be as motivated as the founders to put in long hours or may even try to avoid hard work.
A) Difficult selection
B) Adverse hazard
C) Ethical selection
D) Productivity hazard
E) Moral hazard
Answer:
Tahoe Trips & Trails, a company mentioned in Chapter 1, leads multiday outdoor
adventure trips for private groups and corporate clients to Lake Tahoe, Yosemite, Death
Valley, and similar locations. The company was started by Hanna Sullivan, an
individual that gave up a prestigious job with a private investment company because
Tahoe Trips & Trails better accommodates her personal lifestyle. Tahoe Trips & Trails
is an example of a(n) ________ firm.
A) entrepreneurial
B) salary-substitute
C) standard-of-living
D) statutory
E) lifestyle
Answer:
Which of the following is not a part of assessing the product/service feasibility of a
business idea?
A) buying intentions survey
B) gumshoe research
C) library research
D) analyzing industry attractiveness
E) concept test
Answer:
A network entrepreneur is an individual who identifies his or her business idea:
A) on their own
B) through the assistance of a paid consultant
C) through social contacts
D) with one or more partners
E) through a business incubator program
Answer:
Jenny Templeton is preparing to launch a home security firm. The team of people that
will launch Jenny’s firm are as follows: Jenny (CEO), Brent (VP-Finance), Carrie
(VP-Sales), a four-person Board of Directors, a five-person Board of Advisors, and
Jenny’s primary investor, who will assume an advisory role. The group of people that
will launch Jenny’s firm is called its:
A) startup squad
B) new venture panel
C) new venture team
D) startup cadre
E) startup troop
Answer:
The five industry types discussed in the book include:
A) launching, fragmented, leveled-off, declining, and global
B) emerging, climbing, mature, declining, and worldwide
C) emerging, fragmented, mature, declining, and global
D) climbing, peaking, plateaued, declining, and international
E) launching, consolidated, plateaued, mature, and worldwide
Answer:
The What Went Wrong? feature in Chapter 7 focuses on the failure of Green Plant, a
company that sold smoothie drinks. Green Plant failed in part because it was sued by
Jamba Juice for:
A) copyright infringement
B) trademark infringement
C) violating a nondisclosure agreement
D) theft of trade secrets
E) patent infringement
Answer:
Sam Willis is distributing an instrument, which includes a concept statement with a
short survey attached, to try to gauge customer interest in a product he is developing.
Sam is distributing a:
A) shopper intent survey
B) consumer interest survey
C) product demand survey
D) buying intentions survey
E) purchase intent survey
Answer:
The three most common forms of equity funding are:
A) friends and family, venture capital, bank loans
B) SBIR grants, SBA guaranteed loans, bank loans
C) initial public offerings, business angels, venture capitalists
D) friends and family, business angels, bootstrapping
E) SBIR grants, venture capital, initial public offerings
Answer:
Which of the financial statements used by businesses to keep track of their financial
affairs is the most similar to an ordinary person’s end-of-the month bank statement?
A) income statement
B) balance sheet
C) statement of cash flows
D) statement of ratio analysis
E) statement of owners’ equity
Answer:
According to the textbook, opportunities are:
A) easy to spot
B) easy to spot in fast growing industries but tough to spot in slow growing industries
C) easy to spot in the manufacturing sector but tough to spot in the service sector
D) tough to spot
E) neither easy nor tough to spot
Answer:
Kelly Pryor, who has launched several successful entrepreneurial firms, seems to have a
‘sixth sense” that allows him to see opportunities that others miss. Kelly’s ability is
referred to as:
A) individual awareness
B) cognitive alertness
C) entrepreneurial alertness
D) individual readiness
E) cognitive readiness
Answer:
Which of the following is not one of the five stages in the organizational life cycle?
A) maturity
B) scale
C) decline
D) early growth
E) introduction
Answer:
Once a firm has segmented the market, the next step is to:
A) decide on a position within the segment
B) select a critical market
C) select a target market
D) select a focal market
E) immediately decide on the “4Ps” of the marketing strategy
Answer:
Which of the following factors is a negative as it pertains to the financial feasibility of a
business venture?
A) steady and rapid growth in sales during the first five to seven years in a clearly
defined market niche
B) high percentage of recurring revenuemeaning that once a firm wins a client, the
client will provide recurring sources of revenue
C) inability to forecast income and expenses with a reasonable degree of accuracy
D) internally generated funds to finance and sustain growth
E) availability of an exit opportunity for investors to convert equity into cash
Answer:
Kate Payne was reading the business plan for New Venture Fitness Drinks, and noticed
that prior to its financial statements, New Venture Fitness Drinks placed an explanation
of the sources of the numbers for the statements and the assumptions used to generate
them. This explanation is called a(n):
A) estimate sheet
B) hypothesis sheet
C) assumptions sheet
D) forecast sheet
E) forecast hypothesis
Answer:
________ are characterized by frequent interactions that form between coworkers,
friends, and spouses.
A) Balanced relationships
B) Weak-tie relationships
C) Lateral-tie relationships
D) Moderate-tie relationships
E) Strong-tie relationships
Answer:
Gary Smith just launched a firm in the sports drink industry. He has decided to focus his
efforts on appealing to extreme sports enthusiasts (examples include hang gliders, rock
climbers, and parachutists). In Gary’s case, extreme sports enthusiasts represent his
firm’s:
A) target objective
B) target market
C) goal objective
D) intention market
E) object market
Answer: