Question 1

An example of an idea for a new startup from a hobby is

Accepted Answer

Option A, a coin collector turning into a dealer, is the only example given that fits the criteria of a startup built from a hobby. Option B is not a startup idea that stems from a personal interest or passion, but rather a business opportunity observed by a salesperson. Option C is not a viable business idea and does not demonstrate an interest in building a business.

Question 2

Israel Kirzner believes entrepreneurs have a unique capability, which he calls _________ ________, to spot existing opportunities for businesses.

Accepted Answer

Kirzner's concept of "entrepreneurial alertness" is the ability to discover and identify opportunities that others have overlooked or ignored. It goes beyond just having innovative thinking or market awareness, as it involves a specific ability to perceive and act upon opportunities in the market. Therefore, choice C, "entrepreneurial alertness," is the best answer.

Question 3

A computer technician recognizing a need for more atheistically pleasing computers would be said to have entrepreneurial _____.

Accepted Answer

The given scenario is an example of entrepreneurial alertness, which refers to the ability of an entrepreneur to recognize potential business opportunities that others may have overlooked. In this case, the technician saw a need for more aesthetically pleasing computers and may choose to start a business to address this gap in the market. Options A, C, and D do not accurately describe the situation.

Question 4

Laura discovered to her amazement that the skin oil she sold seemed to repel mosquitos. She relabeled the product and began selling it as alternative to brands such as Cutter and Off!. Laura's startup is which kind?

Accepted Answer

The answer of Laura discovered to her amazement that the...

Question 5

Verlin worked in a cabinet shop until he became frustrated that his ideas for improving efficiency were falling on deaf ears. So he left and started his own cabinet shop where he could implement those ideas. From which source did his ideas for his startup come?

Accepted Answer

Verlin's ideas for his startup came from his work experience in the cabinet shop where he felt his ideas were not being implemented.

Question 6

Match the term with its definition.
-The study of the general and industry environments of a business context to identify potential startup opportunities

Accepted Answer

Outside-in analysis involves studying the external environment of a business context to identify potential startup opportunities.

Answer: A
 Opportunity recognition refers to the process of identifying and evaluating potential business opportunities.

Answer: H
 SWOT Analysis is a strategic planning tool that is used to evaluate the strengths, weaknesses, opportunities, and threats of a business venture.

Answer: F
 Startups are newly established businesses that are in the process of developing and validating their business model.

Answer: G
 Strategy involves formulating and implementing plans and initiatives to achieve a specific goal or objective.

Answer: I
 Tangible resources are physical assets such as land, buildings, equipment, and inventory that a business can use to create value for its customers.

Note: The terms "pivot" and "serendipity" were not defined in the given text.

Question 7

Match the term with its definition.
-Those organizational resources that are visible and easy to measure

Accepted Answer

Tangible resources are those that are visible and easy to measure, such as physical assets, financial resources, and technological equipment.

Question 8

Isabella listens whenever someone says "Someone ought to make a ..." She expects one of these ideas to develop into a profitable business. Isabella possesses:

Accepted Answer

Isabella's behavior indicates that she has entrepreneurial alertness, which is the ability to notice and act upon opportunities to create something new or better than what currently exists in the market.

Question 9

Janis wants to open a restaurant. She is not interested in a franchise; she wants to build her business literally from the ground up. When she does, her business will be classified as a:

Accepted Answer

Janis is starting a business from scratch, meaning she is creating a startup. An entrepreneurial opportunity implies an opportunity for innovation or expansion within an existing business, a new market idea implies identifying a new market opportunity for an existing business, and serendipity refers to a fortunate or unexpected discovery.

Question 10

According to a study by the National Federation of Independent Business Foundation, the most common source of new product ideas for small business startups is

Accepted Answer

The study conducted by the National Federation of Independent Business Foundation found that prior work experience was the most common source of new product ideas for small business startups. This suggests that individuals draw upon their knowledge and expertise gained from previous work to identify potential opportunities and create innovative products that cater to consumer needs.

Question 11

Carol enjoyed yarn crafts but there were no yarn shops in her small town. She reasoned that there were many others nearby who might appreciate being able to purchase yarns and supplies without a long drive. Within a year her shop was profitable and expanding into larger space.Which of these statements best describes this situation?

Accepted Answer

Carol enjoyed yarn crafts as a hobby and recognized a need in her community for a yarn shop. She then turned her hobby into a profitable business that has since expanded into larger space.

Question 12

Wilma needed wine glasses but all she had were candlestick holders and 8-ounce canning jars. Gluing the two together, she created what she called "mountain crystal" which became a big hit. The local crafters' association asked her to make enough for them to sell, and her business took off. This is an example of building a business from:

Accepted Answer

This is an example of accidental discovery, as Wilma did not set out to create a business from her combination of candlestick holders and canning jars.

Question 13

Jeff Bezos' original business plan involved taking orders for books and having the items shipped directly from the publisher to the customer. He modified the plan to include other products such as toys and decided to buy the toys from the producers and ship them from his own warehouse. This modification of the original plan is called:

Accepted Answer

A pivot is when a business modifies its original plan to focus on a different product or service, customer type, or business model. Bezos' decision to shift from only selling books and shipping directly from publishers to buying toys from producers and shipping from his own warehouse represents a pivot in his original business plan.

Question 14

Consuela noticed significant growth in the Hispanic population in her mid-size town. The local grocery carried mostly traditional American products. She knew her neighbors would want familiar foods so she decided to open a food market catering to their preferences. Which kind of startup will her store be?

Accepted Answer

The answer of Consuela noticed significant growth in the Hispanic...

Question 15

Match the term with its definition.
-A facility for making desirable discoveries by accident

Accepted Answer

Serendipity is defined as the facility for making desirable discoveries by accident. It's often considered a factor in innovation and creativity, as unexpected discoveries can lead to new ideas and inventions.

Question 16

Katarina has founded three different businesses in the past eight years, all of which have become so successful she has sold them at large profits. We can say Katarina is good at:

Accepted Answer

Katarina's success in founding and selling businesses indicates that she is skilled at recognizing opportunities and acting on them, making D the best choice. While she may also have innovative ideas and identify new market niches (A and C), these abilities alone are not sufficient to explain her repeated success. "Entrepreneurial alertness" is a related concept, but it refers specifically to the ability to identify and respond to new opportunities in one's current business rather than founding entirely new ventures.

Question 17

_____ refers to the way entrepreneurs identify new products or services that may lead to promising businesses.

Accepted Answer

Opportunity recognition refers to the process of identifying potential business opportunities by observing and analyzing the market, customer needs, and emerging trends. It involves looking for gaps or unmet needs that can be addressed by developing new products or services. This is an essential skill for entrepreneurs as it enables them to spot potential opportunities that others might miss and create successful businesses.

Question 18

Match the term with its definition.
-An assessment that provides a concise overview of a firm's strategic situation

Accepted Answer

SWOT analysis provides a concise overview of a firm's strategic situation by examining its strengths, weaknesses, opportunities, and threats.

Question 19

An example of an idea for a new startup from an accidental discovery is

Accepted Answer

The sharpshooter accidentally discovered a new idea for a startup when she shot holes in her boyfriend's jeans during an argument, and heard him get complimented on the way they looked. This could inspire her to start a new business selling distressed denim or creating unique clothing designs with bullet holes. The other examples given - a coin collector turning into a dealer and a furniture salesperson opening a new store - are more traditional paths to entrepreneurship and do not involve accidental discoveries.

Question 20

When Jeff Bezos launched Amazon.com, his idea of selling items he did not own from a website was unique. Which type of startup is this?

Accepted Answer

The answer of When Jeff Bezos launched Amazon.com, his idea...

Quiz 3: Starting a Small Business

An example of an idea for a new startup from a hobby is

Israel Kirzner believes entrepreneurs have a unique capability, which he calls _ , to spot existing opportunities for businesses.