Some firms feel that they can better appeal to their customers if they can advertise that
they are “the Number 1 firm” in their industry. This sentiment is motivated by the
reason for growth labeled:
A) economies of scope
B) need to accommodate the growth of key customer
C) economies of scale
D) market leadership
E) influence, power, and survivability
Answer:
Entrepreneurial businesses that grow by expanding from their original location to
additional geographic sites are pursuing a:
A) common expansion strategy
B) market penetration strategy
C) universal networking strategy
D) geographic expansion strategy
E) product line extension strategy
Answer:
A ________ market is a place within a larger market segment that represents a narrower
group of customers with similar needs.
A) secondary
B) primary
C) target
D) parallel
E) minor
Answer:
According to a source cited in the textbook, venture capitalists anticipate that the
percentage of investments that will be home runs is about ________ or less.
A) 20 percent
B) 50 percent
C) 5 percent
D) 33 percent
E) 45 percent
Answer:
Two years ago, Jason Jennings and Mary Scott each owned a small chain of bagel
restaurants in Orange County, California. Just recently, they decided to pool their
interests and combine their individual chains of restaurants into one chain. What Jason
and Mary did with their firms is called a(n):
A) licensing agreement
B) strategic alliance
C) acquisition
D) joint venture
E) merger
Answer:
Cameron Smith recently surveyed 200 of his classmates to get a sense of the demand
for a new software product he is working on. Collecting data via a survey you
administer yourself is referred to as:
A) direct research
B) derivative research
C) primary research
D) secondary research
E) initial research
Answer:
The Savvy Entrepreneurial Firm feature in Chapter 11 focuses on Airbnb, the company
that created a marketplace for people to list, discover, and book unique spaces in
people’s homes or apartments while traveling. According to the feature, Airbnb was able
to generate substantial buzz about its service via the use of:
A) Facebook
B) Google AdSense
C) blogs
D) newspaper ads
E) Twitter
Answer:
According to the textbook, there are three issues about business growth that
entrepreneurs should appreciate. These issues are:
A) not all businesses have the potential to be aggressive growth firms, business success
scales, and business growth is a top priority of most entrepreneurial firms
B) business growth is a top priority of most entrepreneurial firms, a business can’t grow
too fast, and businesses that price their products aggressively grow the fastest
C) a business’s valuation increases with its growth, a business can grow too fast, and
business growth is a top priority of most entrepreneurial firms
D) the majority of businesses have the potential to be aggressive growth firms, a
business can’t grow too fast, and business success scales
E) not all businesses have the potential to be aggressive growth firms, a business can
grow too fast, and business success doesn’t always scale
Answer:
The Savvy Entrepreneurial Firm feature in Chapter 5 focuses on three firms that are
doing well in crowded industries for two reasons:
A) they have effectively differentiated themselves from their competitors and they have
captured a first-mover advantage
B) they have passionate leaders and they run savvy promotional campaigns
C) they have captured a first-mover advantage and they have unique business models
D) they create meaningful value for customers at a fair price and they have
differentiated themselves from their competitors
E) they are low-cost leaders and they run savvy promotional campaigns
Answer:
A(n) ________ is a written agreement in which the owner of a piece of property allows
an individual or business to use the property for a specified period of time in exchange
for payments.
A) assurance
B) loan
C) guarantee
D) warranty
E) lease
Answer:
Katherine Chapman recently launched a firm in the clothing industry, targeting teens
ages 13-17. One thing Katherine thinks she has accomplished is producing products that
have universal appeal, so she will not vary her approach from country to country.
Katherine is pursuing a ________ strategy.
A) universal
B) multidomestic
C) contemporary
D) global
E) home
Answer:
The Partnering for Success feature in Chapter 13 focuses on Threadless, the popular
community-centered T-shirt design site. According to the feature, at one point during its
early growth, Threadless almost collapsed under the weight of operational problems.
Threadless solved the problem by:
A) hiring professional managers
B) replacing the founder CEO with a seasoned CEO from an established company
C) hiring a consulting firm
D) selling a minority interest to a venture capital firm, which provided Threadless
operational assistance
E) merging with Zappos and folding its operations into Zappos’ operations
Answer:
According to the textbook, a franchisee’s weekly or monthly royalty fees are typically
around ________ of gross income.
A) 1%
B) 3%
C) 5%
D) 7%
E) 9%
Answer:
________ is typically issued to conservative investors who have preferential rights over
common stockholders in regard to dividends and to the assets of the corporation in the
event of liquidation.
A) Restricted stock
B) Partial stock
C) Preferred stock
D) Common stock
E) Limited liability stock
Answer:
Which of Porter’s five forces is most closely associated with the concept “barrier to
entry”?
A) bargaining power of suppliers
B) rivalry among existing firms
C) threat of new entrants
D) bargaining power of buyers
E) threat of substitutes
Answer:
________ are similar to economies of scale, except the advantage comes through the
scope (or range) of a firm’s operations rather than from its scale of production.
A) Economies of reach
B) Economies of span
C) Economies of capacity
D) Economies of range
E) Economies of scope
Answer:
An individual who identifies a business idea on his or her own is referred to as a(n):
A) separate entrepreneur
B) functional entrepreneur
C) lone entrepreneur
D) individual entrepreneur
E) solo entrepreneur
Answer:
A ________ survey is an instrument that is used to gauge customer interest in a product
or service.
A) shopper intent
B) purchase intent
C) product demand
D) consumer interest
E) buying intentions
Answer:
Andy Dungy owns a company that makes Apple iPod, iPhone, and iPad accessories. He
is trying to increase his sales, primarily because he knows that increasing production
lowers the average cost of each unit produced. The reason for growth illustrated in this
example is:
A) economies of scope
B) market leadership
C) influence, power, and survivability
D) need to accommodate the growth of key customers
E) economies of scale
Answer:
The increasing number of social networks on the Internet is attributed to a jump in the
number of people who are wanting to connect with one another online. The increasing
number of social networks is an important:
A) political trend
B) economic trend
C) legal trend
D) social trend
E) economic trend
Answer:
Which of the following is not a personality trait or characteristic common among
entrepreneurs?
A) promoter
B) visionary
C) short attention span
D) alert to opportunities
E) self-starter
Answer:
A common way that gaps in the marketplace are recognized is:
A) by observing changing environmental trends
B) by recognizing problems that need to be solved
C) via studying industry reports
D) when people become frustrated because they can’t find a product or service that they
need and recognize that other people feel the same way
E) via combined focus groups and brainstorming sessions
Answer:
Which of the following is not an example of intellectual property?
A) Proactiv’s formula for acne medication
B) Google’s trademark
C) the Internet domain name www.nytimes.com
D) Microsoft’s Windows operating system
E) a computer mouse
Answer:
________ involves a firm’s relationship with its suppliers and involves all the activities
of receiving, storing, and shipping component parts to the place where they will be
added to the final product.
A) Resource procurement
B) Operations
C) Outbound logistics
D) Technology development
E) Inbound logistics
Answer:
A(n) ________ is a graphic representation of how authority and responsibility are
distributed within a company.
A) organizational chart
B) personnel chart
C) human resources chart
D) administrative chart
E) directional chart
Answer:
The Savvy Entrepreneurial Firm feature in Chapter 6 focuses on the topic of vesting
company stock. According to the feature, a typical startup’s vesting schedule lasts
________ and includes a 12-month cliff.
A) 12 months
B) 12 months to 24 months
C) 24 months to 36 months
D) 36 months to 48 months
E) 48 months to 60 months
Answer:
________, a relatively new approach to partnering, takes place when a service provided
comes inside a partner’s facilities and helps the partner design and manage its supply
chain.
A) Permeating
B) Infiltrating
C) Penetrating
D) Fulfilling
E) Insourcing
Answer:
Which of the following statements is not true about women-owned businesses in the
United States?
A) There are a growing number of groups that support and advocate for women-owned
businesses.
B) Women-owned firms still trail male-owned businesses in terms of sales and profits.
C) The top industry for women-owned firms is manufacturing.
D) Over 50% of women-owned firms are home-based.
E) The number of women-owned businesses is increasing.
Answer:
The most important issues to consider in financial feasibility analysis are: financial
performance of similar businesses, total cash needed, and:
A) the projected internal rate of return of the proposed venture
B) the projected years to an IPO or an acquisition for the proposed venture
C) management prowess
D) overall attractiveness of the proposed venture
E) the projected borrowing power of the proposed business
Answer:
________ costs are costs that a company incurs whether it sells something or not.
A) Fixed
B) Consistent
C) Steady
D) Variable
E) Regular
Answer:
Which mechanism for firm growth involves the creation and sale of new products or
services?
A) acquisitions
B) licensing
C) franchising
D) new product development
E) international expansion
Answer:
Which of the following is not one of the standards that a business must meet to qualify
for status as a subchapter S corporation?
A) The business must be a subsidiary of another corporation.
B) All shareholders must agree to have the corporation formed as a subchapter S
corporation.
C) It can have no more than 100 members (husbands and wives count as one member).
D) It can have only one class of stock issued and outstanding.
E) The shareholders must be U.S. citizens.
Answer:
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) Michael Porter
B) H.H. Stevenson
C) Joseph Schumpeter
D) Thomas Friedman
E) Jim Collins
Answer:
Ned Kite is a four time business owner. One thing that has served Ned well throughout
his entrepreneurial career is his ability to build and maintain relationships with people
whose interests are similar or whose relationships could bring advantages to his new
ventures. According to the textbook, Ned is a good:
A) networker
B) socializer
C) linker
D) assembler
E) connector
Answer:
From a broad perspective, firms choose one of two generic strategies to position
themselves in the marketplace. These are:
A) high quality and low cost
B) discount pricing and premium pricing
C) value and low cost
D) cost leadership and differentiation
E) cost premium and separation
Answer: