1. Jason has started a restaurant of his own. He makes all the major operational decisions and is completely liable for the
profits and losses the restaurant makes. Jason is most likely to be a(n):
a.
SCORE volunteer.
b.
first-line manager.
c.
angel investor.
d.
venture capitalist.
e.
entrepreneur.
2. Which of the following statements is true about entrepreneurs?
a.
They are typically angel investors.
b.
They essentially start new businesses.
c.
They essentially hire professional managers.
d.
They essentially manage businesses of other individuals.
e.
They are essentially employees of a corporation.
Moderate
p. 129
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United States – BUSPROG: Analytic
United States – AK – DISC: Creation of Value
The Nature of Entrepreneurship
Bloom’s: Comprehension
Digital Story: Connect
3. Which of the following statements is true about entrepreneurs?
a.
Entrepreneurs hire professional managers to take care of all the business operations.
b.
Professional managers who manage businesses of others are also entrepreneurs.
c.
Entrepreneurs assume the risks of their business ventures.
d.
Entrepreneurs do not participate in planning and organizing activities.
e.
Entrepreneurs do not invest personal savings in their businesses.
c
e
Challenging
p. 129
MGMT.GRIF.16. 5-1 – LO: 5-1
United States – BUSPROG – Analytic – Business knowledge and analytic skills
United States – AK – DISC: Creation of Value
The Nature of Entrepreneurship
Bloom’s: Application
Digital Story: Perform
4. Entrepreneurs:
a.
are essentially limited partners in a business venture who assume minimal risks.
b.
do not directly participate in the operation of a business venture.
c.
are individuals who invest in promising start-ups established by others.
d.
are involved in planning and organizing activities of a business venture.
e.
are individuals who exclusively start non-profit organizations.
p. 129
United States – BUSPROG: Reflective Thinking
United States – AK – DISC: Creation of Value
The Nature of Entrepreneurship
Digital Story: Connect
5. Who among the following is most likely to be an entrepreneur?
a.
b.
c.
d.
e.
p. 129
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United States – BUSPROG: Diversity
p. 129
MGMT.GRIF.16. 5-1 – LO: 5-1
United States – AK – DISC: Creation of Value
The Nature of Entrepreneurship
Digital Story: Connect
6. Sarah has started a day care centre of her own. She makes the major decisions about how the centre runs, what services
it provides, and at what prices. She has funded the venture with her own savings and will be taking up complete
responsibility of the success or failure of the venture. Sarah is most likely a(n) _____.
a.
commercial financer
b.
retailer
c.
venture capitalist
d.
angel investor
e.
entrepreneur
e
Challenging
p. 129
MGMT.GRIF.16. 5-1 – LO: 5-1
United States – BUSPROG: Diversity
United States – AK – DISC: Creation of Value
The Nature of Entrepreneurship
Bloom’s: Application
Digital Story: Perform
7. A _____ is privately owned by one individual or a group of individuals and has sales and assets that are not adequate
enough to meaningfully influence its environment.
a.
publicly held corporation
b.
regulatory agency
c.
non-profit organization
d.
strategic business unit
e.
small business
e
environment.
Easy
p. 131
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United States – BUSPROG: Analytic
United States – AK – DISC: Creation of Value
The Nature of Entrepreneurship
Bloom’s: Knowledge
Digital Story: Engage
United States – AK – DISC: Creation of Value
Digital Story: Perform
8. Gadgetbug, a gadget repair store, has 26 employees and operates in a two-storey building. The firm is well known in
the community and the city in which it operates but not in the entire country. Gadgetbug manages to make annual sales of
$80,000. Gadgetbug qualifies as a _____.
a.
small business
b.
corporation
c.
regulatory agency
d.
not-for-profit organization
e.
strategic business unit
9. Which of the following is true of small businesses?
a.
Small business hire a minimum of 200 employees.
b.
Small firms constitute 2 percent of all businesses in the United States.
c.
Small businesses have a strong presence in the economy of the United States.
d.
Small businesses have no presence in the technology sector.
e.
Small businesses hire at a much slower rate than big businesses during economic recovery.
c
Moderate
p. 129
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United States – BUSPROG – Analytic – Business knowledge and analytic skills
United States – AK – DISC: Creation of Value
The Role of Entrepreneurship in Society
Bloom’s: Comprehension
Digital Story: Connect
10. Which of the following statements is true about small businesses in the United States?
a.
Small businesses hire at a slower rate than big companies.
b.
Technology is the only sector in which small firms have no presence.
c.
Small businesses are the last to lay off workers during economic downswings.
d.
There are very few small firms in the United States.
e.
Most U.S. workers are employed by small firms.
a
Challenging
p. 129
MGMT.GRIF.16. 5-1 – LO: 5-1
United States – BUSPROG: Analytic
United States – AK – DISC: Creation of Value
The Nature of Entrepreneurship
Bloom’s: Application
Digital Story: Perform
11. Which of the following statements is true about small businesses?
a.
They constitute 2 percent of all businesses in the United States.
b.
The vast majority of small firms are owner-operated.
c.
Small businesses are least likely to lay off workers during economic downswings.
d.
Small businesses hire at a slower rate than large companies.
e.
Most small businesses in the United States have more than 500 employees.
p. 130
MGMT.GRIF.16. 5-2 – LO: 5-2
United States – BUSPROG – Analytic – Business knowledge and analytic skills
United States – AK – DISC: Creation of Value
The Role of Entrepreneurship in Society
Bloom’s: Comprehension
Digital Story: Connect
12. Small businesses:
a.
are a key source of new jobs in various industries.
b.
are not present in the technology sector.
c.
are least likely to lay off workers during economic downswings.
d.
employ 0.2 percent of all workers in the United States.
e.
hire at a slower rate than large companies during economic recovery.
p. 131
MGMT.GRIF.16. 5-2 – LO: 5-2
well-paid) jobs in the United States.
p. 131
United States – BUSPROG: Analytic
United States – AK – DISC: Creation of Value
The Role of Entrepreneurship in Society
Bloom’s: Comprehension
Digital Story: Connect
13. Identify the true statement about small businesses.
a.
New jobs are also being created by small firms specializing in international business.
b.
Public policies and government regulations have limited the growth of small businesses.
c.
Most small firms in the United States have more than 500 employees.
d.
Smaller firms eliminate employees at a slower rate than large firms during economic downswings.
e.
Innovations are least likely to come from small businesses.
New jobs are also being created by small firms specializing in international business.
p. 131
MGMT.GRIF.16. 5-2 – LO: 5-2
United States – BUSPROG – Analytic – Business knowledge and analytic skills
United States – AK – DISC: Creation of Value
The Role of Entrepreneurship in Society
Digital Story: Connect
14. Which of the following is a true statement about small businesses?
a.
Small businesses are the first to hire in times of economic recovery.
b.
Small businesses provide the least scope for innovation.
c.
Small businesses are the last to lay off workers during economic downswings.
d.
Small businesses employ less than 2 percent of all workers in the United States.
e.
Small businesses do not have a presence in the technology sector.
p. 131
MGMT.GRIF.16. 5-2 – LO: 5-2
United States – BUSPROG – Analytic – Business knowledge and analytic skills
United States – AK – DISC: Creation of Value
The Role of Entrepreneurship in Society
15. Which of the following is an accurate statement about small businesses?
a.
They hire at a much slower rate than large companies.
United States – BUSPROG – Analytic – Business knowledge and analytic skills
United States – AK – DISC: Creation of Value
The Role of Entrepreneurship in Society
Bloom’s: Comprehension
Digital Story: Connect
b.
They are likely to eliminate jobs at a far higher rate than large companies.
c.
They provide little scope for innovation.
d.
They constitute 3 percent of all businesses in the United States.
e.
They employ only 4 percent of all workers in the United States.
16. Which of the following is a true statement about small businesses and large businesses?
a.
Small businesses are about as likely to innovate as large businesses.
b.
Large businesses have been responsible for virtually every major product innovation.
c.
Most small businesses in the technology sector have been failures.
d.
All successful new start-ups are leading-edge dot-com enterprises.
e.
Large businesses hire at a higher rate than small businesses.
p. 132
MGMT.GRIF.16. 5-2 – LO: 5-2
United States – BUSPROG: Technology
United States – AK – DISC: Creation of Value
The Role of Entrepreneurship in Society
Bloom’s: Comprehension
Digital Story: Connect
17. Identify an accurate statement about small businesses and large businesses.
a.
Most of the products made by big manufacturers are sold to consumers by small businesses.
b.
Innovations are least likely to come from small businesses.
c.
Large businesses are likely to eliminate jobs at a far higher rate than small businesses.
d.
Large businesses hire at a much faster rate than small businesses.
e.
Large businesses consistently supply the majority of all “innovations” introduced into the U.S. marketplace
each year.
Most of the products made by big manufacturers are sold to consumers by small businesses.
p. 131
MGMT.GRIF.16. 5-2 – LO: 5-2
United States – BUSPROG: Reflective Thinking
United States – AK – DISC: Creation of Value
The Role of Entrepreneurship in Society
Bloom’s: Comprehension
Digital Story: Connect
18. Small businesses:
a.
dominate industries that require more resources.
b.
are the last to lay off workers during economic downswings.
c.
provide fewer innovations than large companies.
d.
hire at a lower rate than large employees.
e.
provide big businesses with many of the services they need.
p. 133
MGMT.GRIF.16. 5-2 – LO: 5-2
United States – BUSPROG – Analytic – Business knowledge and analytic skills
United States – AK – DISC: Creation of Value
The Role of Entrepreneurship in Society
Bloom’s: Comprehension
Digital Story: Connect
19. Which of the following is a good strategy for small businesses?
a.
Starting service businesses
b.
Choosing industries that require more resources
c.
Starting manufacturing rather than retailing businesses
d.
Avoiding retailing industries
e.
Choosing markets that require high investment costs
p. 133
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United States – BUSPROG – Analytic – Business knowledge and analytic skills
United States – AK – DISC: Creation of Value
Strategy for Entrepreneurial Organizations
p. 149
MGMT.GRIF.16. 5-5 – LO: 5-5
United States – BUSPROG – Analytic – Business knowledge and analytic skills
United States – AK – DISC: Group Dynamics
The Performance of Entrepreneurial Organizations
Bloom’s: Comprehension
Digital Story: Connect
20. The _____ industry provides a higher return on time invested than any other industry group.
a.
retail
b.
manufacturing
c.
service
d.
construction
e.
finance
c
Easy
p. 134
MGMT.GRIF.16. 5-3 – LO: 5-3
United States – BUSPROG – Analytic – Business knowledge and analytic skills
United States – AK – DISC: Creation of Value
Strategy for Entrepreneurial Organizations
Digital Story: Engage
21. Which of the following statements is true about the service industry?
a.
The service industry provides no scope for developing niche strategies.
b.
The service sector is dominated by large companies that prevent small businesses from entering the industry.
c.
The service industry provides low returns on the time invested.
d.
Service businesses require more resources than any other industry.
e.
Service businesses are the fastest-growing segment of small-business enterprise.
e
segment of small-business enterprise.
Moderate
p. 133
MGMT.GRIF.16. 5-3 – LO: 5-3
United States – BUSPROG: Reflective Thinking
United States – AK – DISC: Creation of Value
Strategy for Entrepreneurial Organizations
Bloom’s: Comprehension
Digital Story: Connect
22. Service businesses:
a.
comprise about 4.2 percent of all firms with fewer than 20 employees.
b.
require high investment costs.
c.
appeal to the talent for innovation typified by many small enterprises.
Digital Story: Connect
d.
provide little scope for the development of niche strategies.
e.
are involved in selling products manufactured by other businesses.
23. Edinberg Animal Hospital is a veterinary clinic. It operates in the _____ industry.
a.
wholesale
b.
service
c.
retailing
d.
manufacturing
e.
finance
Moderate
p. 134
MGMT.GRIF.16. 5-3 – LO: 5-3
United States – BUSPROG: Reflective Thinking
United States – AK – DISC: Creation of Value
Strategy for Entrepreneurial Organizations
Bloom’s: Application
Digital Story: Perform
24. Angela runs a babysitting referral agency. Her work involves referring reliable and qualified babysitters to busy
parents on a monthly, weekly, or hourly basis. She earns money by charging a nominal referral fee to the parents, and gets
commissions from the babysitters for referring them. Angela’s business operates in the _____ industry.
a.
service
b.
retail
c.
wholesaling
d.
finance
e.
insurance
a
Angela’s business operates in the service industry. Small-business services range from
c
Moderate
p. 133
MGMT.GRIF.16. 5-3 – LO: 5-3
United States – BUSPROG – Analytic – Business knowledge and analytic skills
United States – AK – DISC: Creation of Value
Strategy for Entrepreneurial Organizations
Digital Story: Engage
25. Pet care salons, skin clinics, and day care centres are all examples of businesses operating in the _____ industry.
a.
retail
b.
service
c.
manufacturing
d.
construction
e.
finance
Moderate
p. 134
26. A _____ business sells directly to consumers products manufactured by other firms.
a.
service
b.
finance
c.
manufacturing
d.
wholesale
e.
retail
e
Easy
p. 134
Easy
p. 134
27. The Red Wagon Utility Store sells home supplies to residents on Charlton Street. It operates in the _____ industry.
a.
wholesale
b.
service
c.
retail
d.
manufacturing
e.
finance
c
A retail business sells directly to consumers products manufactured by other firms.
Moderate
p. 134
MGMT.GRIF.16. 5-3 – LO: 5-3
United States – BUSPROG: Reflective Thinking
United States – AK – DISC: Creation of Value
Strategy for Entrepreneurial Organizations
Bloom’s: Application
Digital Story: Perform
28. Ryan has started a store where customers can find a wide range of organic products manufactured by different
companies. Ryan’s business is in the _____ industry.
a.
retail
b.
service
c.
finance
d.
manufacturing
e.
wholesale
a
manufactured by other firms.
Challenging
p. 134
MGMT.GRIF.16. 5-3 – LO: 5-3
United States – BUSPROG: Analytic
United States – AK – DISC: Creation of Value
Strategy for Entrepreneurial Organizations
Digital Story: Perform
29. Samantha runs a store that exclusively sells handmade vegan cosmetics. The store has a wide range of products
manufactured by different companies. The store is relatively small in size and Samantha did not have to invest a lot in it.
She knows that only a small segment of customers buy such products and she exclusively focuses on them. Which of the
following can be inferred from the scenario?
a.
Samantha runs a wholesale store.
Strategy for Entrepreneurial Organizations
Digital Story: Engage
b.
Samantha uses a niche strategy in the retail industry.
c.
Samantha uses a cost leadership strategy in the service industry.
d.
Samantha uses a product differentiation strategy in the manufacturing industry.
e.
Samantha uses a market penetration strategy in the manufacturing industry.
30. Which of the following is a good strategy for small businesses entering the retail industry?
a.
Targeting a wide customer base
b.
Selling standard rather than specialty products
c.
Focusing on a narrow market segment
d.
Increasing overhead costs
e.
Emphasizing a cost leadership rather than a niche strategy
Moderate
p. 134
MGMT.GRIF.16. 5-3 – LO: 5-3
United States – BUSPROG – Analytic – Business knowledge and analytic skills
United States – AK – DISC: Creation of Value
Strategy for Entrepreneurial Organizations
Bloom’s: Comprehension
Digital Story: Connect
31. Johnson recently launched a new electronics store in Fremont. The store sells smartphones, laptops, and mobile
accessories from companies like Apple, Samsung, Sony, and Philips. The store operates in the _____ industry.
a.
manufacturing
b.
wholesale
c.
finance
d.
service
e.
retail
e
A retail business sells directly to consumers products manufactured by other firms.
Challenging
p. 134
MGMT.GRIF.16. 5-3 – LO: 5-3
United States – BUSPROG: Analytic
United States – AK – DISC: Creation of Value
Strategy for Entrepreneurial Organizations
Digital Story: Perform
32. Jordon owns a pet shop which sells specialty products like birthday cakes for dogs, canned cat food, and live food for
fishes. He sources these animal foods from different manufacturers, and sells it to local residents. Jordon’s shop operates
in the _____ industry.
a.
retail
b.
wholesale
c.
service
d.
manufacturing
e.
finance
a
Challenging
p. 134
33. Mortgage companies, and pawnshops operate in the _____ industry.
a.
wholesale
b.
retail
c.
services
d.
manufacturing
e.
finance
e
Easy
p. 136
Challenging
p. 134
34. Graver Bros. Inc. is a company that buys packaged organic grains from local farmers and sells it to supermarkets in
large cities. Graver Bros. Inc. operates in the _____ industry.
a.
wholesale
b.
retail
c.
manufacturing
d.
finance
e.
insurance
a
locations that are convenient for retailers.
Moderate
p. 137
MGMT.GRIF.16. 5-3 – LO: 5-3
United States – BUSPROG: Reflective Thinking
United States – AK – DISC: Creation of Value
Strategy for Entrepreneurial Organizations
Bloom’s: Application
Digital Story: Perform
35. A wholesale business buys products from producers and then sells them to _____.
a.
other manufacturers
b.
retailers
c.
end-users
d.
customers
e.
government regulators
A wholesale business buys products from producers and then sells them to retailers.
Easy
p. 137
MGMT.GRIF.16. 5-3 – LO: 5-3
United States – BUSPROG – Analytic – Business knowledge and analytic skills
United States – AK – DISC: Creation of Value
Strategy for Entrepreneurial Organizations
Digital Story: Engage
36. Which of the following statements is true about wholesalers?
a.
They sell products to the general public.
b.
They need fewer employers than manufacturers or retailers.
c.
They have more customers than service businesses.
Digital Story: Engage
d.
They buy raw materials and process them into products.
e.
They require higher investment costs than manufacturers.
37. _____ serve fewer customers than other providers.
a.
E-tailers
b.
Service providers
c.
Wholesalers
d.
Manufacturers
e.
Retailers
c
Easy
p. 137
MGMT.GRIF.16. 5-3 – LO: 5-3
United States – BUSPROG – Analytic – Business knowledge and analytic skills
United States – AK – DISC: Creation of Value
Strategy for Entrepreneurial Organizations
Digital Story: Engage
38. Nokia and Samsung make cell phones. They operate in the ____ industry.
a.
construction
b.
manufacturing
c.
finance
d.
service
e.
wholesale
Nokia and Samsung operate in the manufacturing industry.
Moderate
than manufacturers, retailers, or service providers.
Easy
p. 137
MGMT.GRIF.16. 5-3 – LO: 5-3
United States – BUSPROG: Reflective Thinking
United States – AK – DISC: Creation of Value
Strategy for Entrepreneurial Organizations
Bloom’s: Comprehension
Digital Story: Connect
39. A good deal of money is usually needed to start a(n) _____ business because of the investment normally required in
equipment, energy, and raw materials.
a.
retail
b.
wholesaling
c.
manufacturing
d.
services
e.
insurance
c
Easy
p. 137
40. Delta LLC. purchases raw materials such as leather and canvas from suppliers and processes them into finished shoes.
Delta LLC. operates in the _____ industry.
a.
construction
b.
E-tailing
c.
service
d.
retail
e.
manufacturing
e
Moderate
p. 137
p. 137
41. The idea that the manufacturing costs per unit decrease as the number of units produced increases is known as _____.
a.
economy of scale
b.
venture capitalism
c.
Reed’s law
d.
the first-mover advantage
e.
the network effect
a
Easy
p. 137
MGMT.GRIF.16. 5-3 – LO: 5-3
United States – BUSPROG – Analytic – Business knowledge and analytic skills
United States – AK – DISC: Creation of Value
Strategy for Entrepreneurial Organizations
Bloom’s: Comprehension
Digital Story: Engage
42. More than any other industry, the _____ industry lends itself to big business.
a.
insurance
b.
wholesale
c.
manufacturing
d.
E-tailing
e.
retail
c
Easy
p. 137
MGMT.GRIF.16. 5-3 – LO: 5-3
United States – BUSPROG – Analytic – Business knowledge and analytic skills
United States – AK – DISC: Information Technologies
Strategy for Entrepreneurial Organizations
Bloom’s: Knowledge
Digital Story: Engage
43. _____ are the aspects of business that a firm performs better than other companies in the same industry.
a.
Niches
b.
Process losses
c.
Distinctive competencies
Digital Story: Connect
d.
Feedback loops
e.
Comparative disadvantages
44. A(n) _____ is a market in which several large firms compete according to relatively well-defined criteria.
a.
emerging market
b.
niche
c.
merged market
d.
established market
e.
frontier market
Easy
p. 139
MGMT.GRIF.16. 5-3 – LO: 5-3
United States – BUSPROG – Analytic – Business knowledge and analytic skills
United States – AK – DISC: Creation of Value
Strategy for Entrepreneurial Organizations
Digital Story: Engage
45. A _____ is a segment of a market that is not currently being exploited.
a.
niche
b.
merger
c.
divestiture
d.
stock
e.
share
a
A niche is a segment of a market that is not currently being exploited.
Easy
p. 139
MGMT.GRIF.16. 5-3 – LO: 5-3
c
p. 139
MGMT.GRIF.16. 5-3 – LO: 5-3
United States – BUSPROG: Analytic
United States – AK – DISC: Creation of Value
Strategy for Entrepreneurial Organizations
Digital Story: Engage
46. Entrepreneurs:
a.
generally choose manufacturing over retailing.
b.
use economies of scale as a competitive advantage to compete with large businesses.
c.
typically do well in manufacturing rather than service businesses.
d.
generally dominate industries that require more resources and high investment costs.
e.
are usually better at discovering new markets than are larger, more mature organizations.
p. 139
MGMT.GRIF.16. 5-3 – LO: 5-3
United States – BUSPROG – Analytic – Business knowledge and analytic skills
United States – AK – DISC: Creation of Value
Bloom’s: Comprehension
Digital Story: Connect
47. Which of the following is an example of a company that has identified a new market?
a.
Delta Inc. is offering discounts on its vacuum cleaners.
b.
NutriMax has introduced its low-fat cookies in Asia.
c.
Omega Corp. has modified the packaging of all its products.
d.
Beta Inc. has acquired Venus LLC.
e.
Redd Inc. has changed its company logo.
p. 139
MGMT.GRIF.16. 5-3 – LO: 5-3
United States – BUSPROG: Reflective Thinking
United States – AK – DISC: Creation of Value
Strategy for Entrepreneurial Organizations
Bloom’s: Application
Digital Story: Perform
48. Identify an accurate comparison between small businesses and large businesses.
a.
Small businesses are better than large businesses in identifying niches.
United States – BUSPROG – Analytic – Business knowledge and analytic skills
United States – AK – DISC: Creation of Value
Strategy for Entrepreneurial Organizations
Digital Story: Engage