Question 1

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:
A) a change of plan
B) a pivot.
C) a serendipity.
D) a competitive move.

Accepted Answer

A pivot refers to a change in a startup's business model or strategy to address a new market opportunity, usually after learning from initial customer feedback or market research. This is exactly what Jeff Bezos did when he decided to expand beyond just books and create his own warehouse to ship various products directly to customers.

Question 2

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?
A) From hobbies
B) From personal interests
C) From accidental discovery
D) From work experience

Accepted Answer

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

Question 3

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?
A) Carol grew a business out of her personal experience.
B) Carol turned her hobby into a thriving business.
C) Carol accidentally stumbled upon a gold mine.
D) Carol used her work experience as a source of startup ideas.

Accepted Answer

Carol turned her personal hobby of yarn crafts into a thriving business by recognizing a need in her community and taking the initiative to fill that need with her yarn shop.

Question 4

An example of an idea for a new startup from a hobby is
A) a coin collector, who bought and sold coins for years to build a personal collection, deciding to become a coin dealer.
B) a furniture salesperson seeing the possibility of opening a new furniture store in a different area of the city.
C) a sharpshooter, who shot holes in a pair of her boyfriend's jeans during an argument, hearing him get complimented on the way they look.
D) all of the above are examples.

Accepted Answer

Option A is the only answer that describes a hobby turning into a startup. The person has a clear expertise in something niche (coin collecting) and is using that expertise to start a business. Option B describes a salesperson identifying a business opportunity, but it's not specifically tied to a hobby. Option C is a personal anecdote, not a business idea.

Question 5

Israel Kirzner believes entrepreneurs have a unique capability, which he calls _________ ________, to spot existing opportunities for businesses.
A) innovative thinking
B) market awareness
C) entrepreneurial alertness
D) opportunity recognition

Accepted Answer

Kirzner coined the term "entrepreneurial alertness" to highlight the unique ability of entrepreneurs to recognize opportunities that others may overlook or not even be aware of. This involves being attuned to changes in the market and identifying ways to create value by satisfying unmet needs or solving problems. While innovation and market awareness are important factors for entrepreneurs, Kirzner's focus on recognizing and seizing opportunities sets his theory apart from other approaches to entrepreneurship.

Question 6

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:
A) innovative ideas.
B) entrepreneurial alertness.
C) new market ideas.
D) opportunity recognition.

Accepted Answer

Katarina's ability to found and sell successful businesses suggests that she is proficient in recognizing opportunities for creating and developing successful businesses.

Question 7

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:
A) entrepreneurial opportunity.
B) startup.
C) new market idea.
D) serendipity.

Accepted Answer

A startup is a newly established business that is typically started by one or a group of entrepreneurs who have identified a need in the market and are creating a business that meets that need. Janis fits this description as she wants to build her business from the ground up and is not interested in a franchise or an existing business.

Question 8

A computer technician recognizing a need for more aesthetically pleasing computers would be said to have entrepreneurial _____.
A) technology
B) alertness
C) strategy
D) rivalry

Accepted Answer

The entrepreneurial quality of alertness refers to an individual's ability to identify new opportunities or needs in the market. In this case, the computer technician recognized the need for more aesthetically pleasing computers, which is an example of alertness.

Question 9

According to a study by the National Federation of Independent Business , the most common source of new product ideas for small business startups is
A) prior work experience.
B) personal interests and hobbies.
C) a chance happening.
D) existing records of a business.

Accepted Answer

The study by the National Federation of Independent Business found that the most common source of new product ideas for small business startups is prior work experience. This suggests that entrepreneurs are drawing on their knowledge and expertise from previous jobs to identify market needs and develop new products.

Question 10

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:
A) serendipity.
B) diversification.
C) innovative thinking
D) market ideas.

Accepted Answer

Richard's decision to shift his focus to a more recession-resistant industry is an example of diversification, which involves expanding a business into new products or services in order to reduce risk and increase opportunities for growth.

Question 11

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?
A) New market idea
B) New technology idea
C) New benefit idea
D) New product idea

Accepted Answer

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

Question 12

The quote "Good artists borrow; great artists steal" is the principle that launched which company?
A) Aimie's Dinner and Movie
B) Apple
C) C and D Landscape Company
D) Xerox

Accepted Answer

The quote "Good artists borrow; great artists steal" is often attributed to Steve Jobs, the co-founder of Apple. The company's success is largely due to their ability to take existing ideas and make them better or transform them into something new and innovative.

Question 13

Isabella listens whenever someone says "Someone ought to make a ..."  She expects one of these ideas to develop into a profitable business.  Isabella possesses:
A) market awareness.
B) entrepreneurial alertness.
C) opportunity recognition.
D) innovative thinking.

Accepted Answer

Isabella's ability to listen to people's ideas and identify potential business opportunities shows that she has entrepreneurial alertness. This is a crucial skill for entrepreneurs as it allows them to identify potential gaps in the market and come up with innovative solutions to address them. While market awareness, opportunity recognition, and innovative thinking are all important skills for entrepreneurs, they do not specifically address Isabella's ability to identify potential business opportunities through listening to others.

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?
A) New market idea
B) New technology idea
C) New benefit idea
D) New product idea

Accepted Answer

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

Question 15

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?
A) New market idea
B) New technology idea
C) New benefit idea
D) New product idea

Accepted Answer

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

Question 16

Drs. James and Janet Baker saw that many people experienced difficulty and frustration when typing, some because of physical disabilities.  So they invented a voice recognition software to allow users to talk to the computer.  Their ideas have become Dragon Naturally Speaking, a popular talk-to-type software application.  Which of these statements describes their startup?
A) Borrow heavility from existing products or services.
B) Combine two businesses to create a market opening.
C) Begin with a problem in mind or a pain you can relieve.
D) Recognize a hot trend and ride the wave.

Accepted Answer

The Bakers identified a problem (people experiencing difficulty and frustration when typing, some because of physical disabilities) and developed a solution (voice recognition software) to relieve the pain.

Question 17

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:
A) work experience.
B) hobbies.
C) personal interest.
D) accidental discovery.

Accepted Answer

Wilma's discovery of creating wine glasses from candlestick holders and canning jars was accidental, making the best choice D.

Question 18

An example of an idea for a new startup from an accidental discovery is
A) a coin collector, who bought and sold coins for years to build a personal collection, deciding to become a coin dealer.
B) a furniture salesperson seeing the possibility of opening a new furniture store in a different area of the city.
C) a sharpshooter, who shot holes in a pair of her boyfriend's jeans during an argument, hearing him get complimented on the way they look.
D) all of the above are examples.

Accepted Answer

The sharpshooter accidentally discovered a new market for distressed denim, which could be the foundation of a new startup. The other options are not accidental discoveries and are common business ideas.

Question 19

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 later part of the day, she started the company.  This change is an example of
A) recognizing a hot trend and riding the wave.
B) combining two businesses into one to create a market opening.
C) beginning with a problem in mind.
D) considering ways to adapt a product or service to meet customer needs in a different way.

Accepted Answer

The answer of Julie, owner of a bed and breakfast...

Question 20

_____ refers to the way entrepreneurs identify new products or services that may lead to promising businesses.
A) Focus-based decisions
B) Elasticity
C) Opportunity recognition
D) Cost-benefit analysis

Accepted Answer

Opportunity recognition refers to the ability of entrepreneurs to identify new or untapped markets, emerging trends, or gaps in the market that represent potential business opportunities. This process involves scanning the environment, gathering information, analyzing data, and applying creativity and innovation to develop new and attractive products or services that meet the needs and wants of customers. Focus-based decisions, elasticity, and cost-benefit analysis are all important concepts in entrepreneurship, but they don't specifically relate to the identification of new business opportunities.

Quiz 3: Starting a Small Business

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?

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.

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:

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:

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

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

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:

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?

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

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

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?

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

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 later part of the day, she started the company. This change is an example of

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