Instructor Resource
Neck, Entrepreneurship
SAGE Publishing, 2018
Chapter 1: Entrepreneurship: A Global Social Movement
Test Bank
Multiple Choice
1. The authors define entrepreneurship as ______.
a. a discipline that seeks to understand how opportunities are discovered, created, and
exploited, by whom, and with what consequences
b. starting a small business by finding investors and launching a product
c. developing a new market by creating a product that does not currently exist
d. a mindset that compels people to start multiple ventures throughout a lifetime.
2. ______ are small, short-term loans often associated with entrepreneurs in developing
countries
a. no-interest loans
b. high-interest loans
c. microloans
d. miniloans
3. This is the discipline that seeks to understand how opportunities are discovered,
created, and exploited, by whom, and with what consequences.
a. imagineering
b. storyboarding
c. social engineering
d. entrepreneurship
Instructor Resource
Neck, Entrepreneurship
SAGE Publishing, 2018
4. Which of the following is NOT a truth about entrepreneurship?
a. Entrepreneurship is reserved for startups.
b. Entrepreneurship can be taught, as it is a method that requires practice.
c. Entrepreneurs collaborate more than they compete.
d. Entrepreneurship is a life skill.
5. The media often cover the meteoric rise of entrepreneurs such as Bill Gates
(Microsoft), Steve Jobs (Apple), Mark Zuckerberg (Facebook),
Elon Musk (Tesla), and Travis Kalanick (Uber). According to the text, these stories:
a. are inspirational but they do little to represent the reality of entrepreneurship.
b. are highly relatable.
c. have not captured the public imagination.
d. are accurate depictions of the reality of entrepreneurship.
6. A temporary organization in search of a scalable business model is known as:
a. a startup.
b. a corporation.
c. an LLC.
d. an entrepreneur.
7. Effectuation is the theory that:
a. businesses should have a positive impact on people’s lives.
b. the effects of ideas can be studied over time.
c. the future is unpredictable yet controllable.
Instructor Resource
Neck, Entrepreneurship
SAGE Publishing, 2018
d. emotions can influence decision-making.
8. Contemporary researchers focus on how entrepreneurs________
a. think and act
b. develop a desire for achievement
c. build a tolerance for uncertainty
d. develop an affinity for taking risks
9. ______ are people who start several businesses, sometimes at the same time or
sometimes one after the other.
a. Social entrepreneurs
b. Serial entrepreneurs
c. High-risk entrepreneurs
d. Low-risk entrepreneurs
10. Which of the following is true about effectual entrepreneurs?
a. They focus on creating a future rather than predicting it
b. They find markets rather than make them,
c. They do not accept failure
d. They rely on the initiative of stakeholders to fulfill their vision of the future
11. According to the authors, what is the precursor to action?
Instructor Resource
Neck, Entrepreneurship
SAGE Publishing, 2018
a. a business process
b. the right mindset
c. a business plan
d. the acquisition of resources
12. The entrepreneurial method requires consistent practice so that ______ can be
continuously developed and applied to future endeavors.
a. a strong business plan
b. education and application
c. business processes
d. knowledge and expertise
13. The risk component for entrepreneurs______.
a. is unavoidable and entrepreneurship is ideal for extreme risk-takers
b. can be reduced with a good business plan
c. can be reduced with diversification
d. can be managed with the cycle of act–learn–build
14. Successful entrepreneurs tend to follow this approach to collaboration:
a. They do not collaborate and work in isolation
b. They collaborate with potential customers, but not with competitors
c. They collaborate with both potential customers and competitors
d. They collaborate with competitors, but not with potential customers
Instructor Resource
Neck, Entrepreneurship
SAGE Publishing, 2018
15. Research revealed what percentage of Inc. 500 wrote formal business plans prior to
launching their companies?
a. More than 90%
b. More than 75%
c. Less than 50%
d. Less than 10%
16. According to the text, which of the following is the least important when launching a
company?
a. Creating a business plan
b. Connecting with customers
c. Building a network
d. Generating buzz
17. What invention came to symbolize the ingenuity of Colonial America?
a. The spinning jenny
b. The telegraph
c. The lightning rod
d. The light bulb
18. Which Founding Father is considered one of history’s greatest entrepreneurs?
a. Thomas Jefferson
b. Benjamin Franklin
c. George Washington
Instructor Resource
Neck, Entrepreneurship
SAGE Publishing, 2018
d. Alexander Hamilton
19. What factor(s) contributed to the golden age of entrepreneurship?
a. improved transportation
b. growth in the economy
c. increase in population
d. all of these
20. A launching pad for creativity and innovation, the ______ provided people with the
right to private property, access to a banking system, and protection in the form of
patent laws.
a. Twelfth Amendment
b. Declaration of Independence
c. Sixteenth Amendment
d. US Constitution
21. During the______, everyone had a fairly equal chance of being an entrepreneur;
inventors became more commonplace, producing new products and services alongside
the merchants and industrialists.
a. First Industrial Revolution (1776–1865)
b. Second Industrial Revolution (1865–1920)
c. Interwar and Postwar America (1920–1975)
d. Knowledge Economy (1975– present)
Instructor Resource
Neck, Entrepreneurship
SAGE Publishing, 2018
22. During which period was entrepreneurship at its height?
a. First Industrial Revolution (1776–1865)
b. Second Industrial Revolution (1865–1920)
c. Interwar and Postwar America (1920–1975)
d. Knowledge Economy (1975– present)
23. In the Pinnacle of Entrepreneurship (Second Industrial Revolution), the entrepreneur
______.
a. was not well respected
b. was considered “self-made” and was glorified in novels
c. worked largely within large corporations
d. paid higher taxes than their neighbors working in the factories
24. During the period between 1920 and 1975, which of the following did NOT
contribute to the decline of the traditional entrepreneur?
a. An increase in production due to the expansion of the middle class
b. The transition toward a knowledge-based economy.
c. The merger of small firms founded by entrepreneurs with larger organizations.
d. The Great Depression
25. What era signaled a shift from the traditional entrepreneur to the big corporation?
a. First Industrial Revolution 1776–1865
b. Second Industrial Revolution 1865–1920
Instructor Resource
Neck, Entrepreneurship
SAGE Publishing, 2018
c. Interwar and Postwar America 1920–1975
d. Knowledge Economy 1.0, 1975–Present
26. Which of the following led to entrepreneurship regaining its popularity over the last
decades of the 20th century?
a. Changes in patent laws
b. The rise of information technology
c. The rise in venture capital funds
d. All of these
27. During which period of time was the “tech entrepreneur” born?
a. First Industrial Revolution 1776–1865
b. Second Industrial Revolution 1865–1920
c. Interwar and Postwar America 1920–1975
d. Knowledge Economy 1.0, 1975–Present
28. What generation is considered to be the most exposed to entrepreneurship
education?
a. Baby Boomers
b. Generation X
c. Millennials
d. Generation Z
Instructor Resource
Neck, Entrepreneurship
SAGE Publishing, 2018
29. Marian Croak’s idea to use the text messaging system she developed for the
television series American Idol in disaster situations is an example of________.
a. Corporate entrepreneurship
b. Entrepreneurs inside
c. Social Entrepreneurship
d. Serial entrepreneurship
30. According to the text, why would some organizations not be enthusiastic about
employees acting entrepreneurially inside a company?
a. Fear that workers will prioritize their entrepreneurial efforts over their essential job
duties
b. Fear that trade secrets will be accidentally released to the public.
c. Fear that they will leave the company and start their own business.
d. Fear that they will not seek approval from senior managers before starting work on
their entrepreneurial initiatives.
31. The launch of the “inglorious vegetable” at the French Supermarket Intermarché as
a way of reducing food waste by selling imperfect vegetables at a 30% discount is an
example of_____
a. Corporate entrepreneurship
b. Entrepreneurs inside
c. Social Entrepreneurship
d. Serial entrepreneurship
Instructor Resource
Neck, Entrepreneurship
SAGE Publishing, 2018
32. What is the process of creating new products, ventures, processes, or renewal
within large organizations?
A. Entrepreneurs inside
B. Tech entrepreneurship
C. Social entrepreneurship
D. Intrapreneurship
33. Tony is a manager a company that builds solar panels. In his position as a manager,
Tony used the feedback from his team members to as the basis of a plan for the
company to start installing the solar panels, as well, in order to enhance the company’s
competitive position and profitability. Tony is an example of ______.
a. an entrepreneur
b. a marketing professional
c. a corporate entrepreneur
d. a strategist
34. Joseph is a sales manager for ETC Corporation. ETC is a manufacturer of high-end
kitchen appliances for restaurants. Nicole has been lobbying her manager to allow her
to design and sell a consumer grade range of consumer-grade appliances using ETC’s
design and manufacturing resources. Joseph is a(n) ______.
A. family entrepreneur
B. franchisee
C. entrepreneur inside
D. social entrepreneur
Instructor Resource
Neck, Entrepreneurship
SAGE Publishing, 2018
35. Robert has a business that he wants to pass down to others in his family to run.
Robert has ______.
a. an entrepreneurship
b. a family enterprise
c. a role as a an entrepreneur inside
d. interest in a benefit corporation
36. The nonprofit “1001 Fountains for Tomorrow”, whose goal is to provide safe drinking
water for small rural villages in Cambodia, is an example of________
a. Corporate entrepreneurship
b. Entrepreneurs inside
c. Social Entrepreneurship
d. Serial entrepreneurship
37. A benefit corporation (or B-Corp) is an organization certified by the nonprofit B Lab
to ensure strict standards of social and environmental performance, accountability, and
transparency are met. According to the book, which of the following statements is true?
a. Large non-profits are leaders in this movement.
b. To host a telethon to raise money, the organization must be a B–Corp.
c. “Buy One, Give One” promotions can generating sales while also raising awareness
of social issues.
d. all of these
Instructor Resource
Neck, Entrepreneurship
SAGE Publishing, 2018
38. Sam is tired of seeing injustice and mistreatment of children in inner cities and has
an innovative idea to help them develop self-esteem. Sam is an example of a ______.
a. social entrepreneur
b. potential entrepreneur
c. nascent entrepreneur
d. benefit entrepreneur
39. Richard Branson’s expansion of Virgin to include railway, music, media, and
banking industries is an example of_______
a. Global entrepreneurship
b. Nascent entrepreneurship
c. Social Entrepreneurship
d. Serial entrepreneurship
40. Michael is a franchise restaurant owner. Which of the following best describes his
franchising costs?
a. a franchise fee to start, a monthly royalty as a percentage of sales, and other
operational costs
b. a royalty to the franchisor calculated as a percentage of net income plus other
operational costs
c. his costs are the same as any other restaurant owner
d. a franchise fee to start plus other operational costs
41. Sally decided to look into buying a franchise as her entrance into entrepreneurship.
Which of the following is NOT a benefit of franchising?
Instructor Resource
Neck, Entrepreneurship
SAGE Publishing, 2018
a. A whole franchise network exists to reach out to for help and advice.
b. potential competition from other franchise owners
c. Real estate resources exist to help source the best location for your franchise.
d. In-house personnel and field reps are available to help you and your business
succeed.
42. ICHOR Restaurant Group was started by Brian Bailey and Tim Hug in 2006 and has
since opened three successful restaurant concepts, “Old Carolina BBQ,” “Smoke: The
Burger Joint,” and “Baja West Coast Kitchen” with a dozen corporate-owned locations.
They have begun to allow external entrepreneurs to purchase a license to operate their
own location(s). Entrepreneurs purchasing such a license are engaging in ______.
A. corporate entrepreneurship
B. franchising
C. entrepreneurs inside
D. social entrepreneurship
43. Social entrepreneurs_______
a. must rely on fundraising to keep their company economically stable
b. can only be found in the nonprofit sector
c. must choose between making either a social or an economic impact
d. seek innovative solutions to social and environmental problems
44. To be certified as a benefit corporation (or B-Corp), an organization is rated on all
the following except:
a. how its employees are treated
Instructor Resource
Neck, Entrepreneurship
SAGE Publishing, 2018
b. its global mission
c. how it benefits the community in which it operates
d. its impact on the environment
45. What is the survival rate of family businesses transitioning from the first to the
second generation?
a. less than 30%
b. 40%
c. 50%
d. more than 75%
46. What percentage of US businesses are family-owned or controlled by a family?
a. Less than 20%
b. 20% to 30%
c. 40% to 50%
d. 80% to 90%
47. Bill is the paternal head of his family and the family enterprise. He is concerned
about the business and wants to ensure its survival for the long run. You, as a
consultant, advise him to focus on ______.
a. selling the company
b. passing on an entrepreneurial mindset to his family members
c. writing a detailed business plan
d. establishing a trust for the business
Instructor Resource
Neck, Entrepreneurship
SAGE Publishing, 2018
48. Maria lost her job. Unable to find work in her chosen field, she decides to start her
own business. What type of entrepreneur is she?
a. necessity-based entrepreneur
b. nascent entrepreneur
c. established business owner
d. potential entrepreneur
49. According to the 2015/16 Global Entrepreneurship Monitor report, it is estimated
that there are ______ entrepreneurs worldwide.
A. 4 million
B. 40 million
C. 400 million
D. 4 billion
50. Individuals who believe they have the capacity and know-how to start a business
without being burdened by the fear of failure are known as_______
a. venture capitalists
b. angel investors
c. potential entrepreneurs
d. creative directors