Question 1

Which of the following statements is an example of a technological trend?

Accepted Answer

The development of a new computer chip that enables miniaturization of electronic devices is an example of a technological trend. This trend will impact the design and functionality of many electronic devices, leading to smaller, more efficient and advanced gadgets. The other options are economic and political in nature and do not relate to technology trends.

Question 2

Julie, owner of a bed and breakfast inn, had been asked repeatedly to cater events. Once she realized her kitchen was not being used during the latter part of the day, she started the company. This change is an example of

Accepted Answer

Julie's decision to start catering events because her kitchen was underutilized during certain times and in response to customer requests is an example of combining her existing bed and breakfast business with a new catering service, thereby creating a new market opportunity. This is not about following a trend, solving a pre-existing problem, or leveraging the sharing economy, but rather about expanding her business offerings based on available resources and customer demand.

Question 3

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 based on a new _____ idea.

Accepted Answer

Laura's startup is based on a new benefit idea because she discovered an additional, previously unrecognized advantage of her product (its mosquito-repelling properties) and leveraged it to enter the market in a new way.

Question 4

Richard could see the demand for towable recreational vehicles declining, so beginning in the early 1970s he used his equipment, employees, and professional network to design and build utility trucks-a more recession-resistant industry. This is an example of

Accepted Answer

Richard's decision to shift his focus to building utility trucks is an example of diversification, as he diversified his business into a new industry that he believed would be more recession-resistant than his previous focus on towable recreational vehicles. This was a strategic move to minimize risk and maintain profitability.

Question 5

Drs. James and Janet Baker saw that many people experienced difficulty and frustration when typing, particularly from physical disabilities, so they invented a voice recognition software to allow users to talk to the computer. Their idea resulted in Dragon NaturallySpeaking, a popular talk-to-type software application. Which of the following suggestions for generating business ideas describes how the Bakers conceived their startup?

Accepted Answer

The Bakers began with a problem in mind - the difficulty and frustration many people experienced when typing, particularly from physical disabilities - and invented a solution through their voice recognition software.

Question 6

Which of the following statements is an example of an economic trend?

Accepted Answer

The announcement of a decrease in interest rates by the Federal Reserve is a trend in the economy as it may affect borrowing and lending rates, which can have broader impacts on various industries and economic activities.

Question 7

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

Wilma stumbled upon the idea of combining candlestick holders and canning jars to make wine glasses, which was an accidental discovery.

Question 8

Which of the following is an example of an idea for a new startup coming from a hobby?

Accepted Answer

Option A describes an individual who has a hobby of coin collecting and decides to turn it into a business venture as a coin dealer.

Question 9

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 the following statements best describes this situation?

Accepted Answer

Carol's personal interest and passion for yarn crafts led her to identify a need in her community and pursue a business opportunity in that area. She turned her hobby into a successful business venture.

Question 10

Because many commuters grab a cup of coffee and drink it during their ride to work, someone invented specially shaped cups that don't tip and lids with sip openings that close and don't spill. Which of the following innovative ways of thinking best fits this situation?

Accepted Answer

The innovation in this situation is focused on improving the function of an existing product, the coffee cup and lid, by making them spill-proof and tip-resistant.

Question 11

Alyson and Andrea, country artists, realized that their love of classic rock was also popular with their fans. Their change to their show to incorporate more rock songs with a country flavor is an example of

Accepted Answer

Alyson and Andrea adapted their show to meet the different customer needs of their fans who enjoyed classic rock as well as country music. They recognized a customer need and adapted their product to meet that need in a different way. This is an example of adapting a product or service to meet customer needs in a different way.

Question 12

The quote "Good artists borrow; great artists steal" is the principle that launched which of the following companies?

Accepted Answer

The quote "Good artists borrow; great artists steal" is famously attributed to Apple founder Steve Jobs. It reflects Apple's approach to innovation, which often involves taking existing ideas or concepts and refining or reimagining them in new and innovative ways.

Question 13

Which of the following is an example of an idea for a new startup coming from an accidental discovery?

Accepted Answer

The accidental discovery of the sharpshooter shooting holes in her boyfriend's jeans and receiving compliments on their look could lead to the idea for a new startup focused on distressed denim or unique clothing designs.

Question 14

Two general approaches that can help identify business ideas are _____ and _____ analyses.

Accepted Answer

Outside-in and inside-out analyses are two strategic approaches used to identify business opportunities by looking at external market trends and internal capabilities, respectively.

Question 15

Which of the following statements is an example of a political/legal trend?

Accepted Answer

Congress passing legislation to increase tax rates on corporations is an example of a political/legal trend as it involves a change in laws and regulations related to business and taxation. The other options (A, C, and D) are related to economic or technological trends, not political/legal ones.

Question 16

All of the following are trends in the general environment EXCEPT

Accepted Answer

Strategic trends typically fall under the specific environment as they are directly related to a particular industry or market. The other three options, demographic, global, and sociocultural trends, are all examples of general environment trends.

Question 17

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 of the following sources did his ideas for his startup come?

Accepted Answer

Verlin's ideas for improving efficiency in his cabinet shop likely came from his work experience in the cabinet shop industry.

Question 18

For the past several years, the borrowing interest rates have been very low in the United States. This is an example of a(n) _____ trend.

Accepted Answer

The borrowing interest rates are directly related to the economy and its policies. Therefore, it is an economic trend.

Question 19

When Sally realized her vintage clothing pieces were being bought by the local college students and not just their parents, she started adding more vintage pieces to her inventory. Sally is

Accepted Answer

Sally is recognizing the trend that college students are interested in vintage clothing and adjusting her inventory accordingly to appeal to that market demand. She is riding the wave of this trend by offering more vintage pieces, which shows she is adaptable and responsive to changing customer needs.

Question 20

Angela noticed an interest among her friends and colleagues in wearing high-end watches and other jewelry for special occasions, so she started a company where customers could rent high-end jewelry. Angela is

Accepted Answer

Angela is capitalizing on the sharing economy by allowing customers to rent high-end jewelry instead of purchasing it outright.

Quiz 3: Starting a Small Business