Question 1

As new products that are better than the existing generation of products are introduced, sales normally increase because the new products provide consumers increased value or worth. This process, which is called ________, stimulates economic activity, which is a good thing for the economy.

Accepted Answer

Creative destruction refers to the process where newer and better products replace older ones, leading to increased economic activity and growth. This process can be seen as a positive force in the economy, as it encourages innovation and progress.

Question 2

Among minorities, ________ -owned firms had the highest growth rate from 1996 to 2010.

Accepted Answer

The answer of Among minorities, ________ -owned firms had the...

Question 3

According to the textbook, the biggest jump in entrepreneurial activity, by age range, from 1996 to 2010 is among entrepreneurs in the:

Accepted Answer

According to the textbook, the biggest jump in entrepreneurial activity, by age range, from 1996 to 2010 is among entrepreneurs in the 55 to 64 age range. This is likely due to a combination of factors, including a desire for greater control over their careers and financial futures, increased access to technology and resources, and a changing economic landscape.

Question 4

Entrepreneurial firms:

Accepted Answer

Entrepreneurial firms are known for bringing new products and services to the market by creating and seizing opportunities. They are focused on innovation and growth, rather than simply providing a way for the owner to earn a living or pursue a particular lifestyle.

Question 5

Tahoe Trips & Trails, a company mentioned in Chapter 1, leads multiday outdoor adventure trips for private groups and corporate clients to Lake Tahoe, Yosemite, Death Valley, and similar locations. The company was started by Hanna Sullivan, an individual that gave up a prestigious job with a private investment company because Tahoe Trips & Trails better accommodates her personal lifestyle. Tahoe Trips & Trails is an example of a(n) ________ firm.

Accepted Answer

Tahoe Trips & Trails was started by Hanna Sullivan because it better accommodates her personal lifestyle, indicating that it is an example of a lifestyle firm.

Question 6

Pacific Printing LLC is a startup that is working on a new technology for the printing industry. Because the technology it's working on is highly proprietary, the company is located in the warehouse district of a large western city. Pacific's founder, Jan Sims, rarely gives interviews, and is careful to not divulge much about what the company is doing. Which of the following common myths about entrepreneurs does the behavior of its founder, Jan Sims, dispel?

Accepted Answer

Jan Sims' behavior dispels the myth that entrepreneurs love the spotlight. She rarely gives interviews and is careful to not divulge much about the company, indicating that she is not motivated by fame or public attention.

Question 7

According to the textbook, Google, Facebook, and Zynga are examples of ________ firms.

Accepted Answer

The textbook mentions that Google, Facebook, and Zynga are examples of entrepreneurial firms, which are typically newer firms that pursue opportunities and innovation with a potentially high rate of growth and profitability. These firms often have a high level of autonomy and flexibility in their operations and are founded by individuals who are risk-taking and innovative.

Question 8

Which of the following statements is not true about women-owned businesses in the United States?

Accepted Answer

According to the National Association of Women Business Owners, the top industry for women-owned firms is actually healthcare and social assistance, not manufacturing.

Question 9

Kentucky Soup and Salad is a casual dining restaurant that has been owned by Kenneth Peterson for the past 11 years. The restaurant offers a menu that is typical for casual dining restaurants and affords Kenneth a level of income that is similar to what he would earn in a conventional job. According to the textbook, Kentucky Soup and Salad is an example of a(n):

Accepted Answer

A salary-substitute firm is a small firm that provides its owner a level of income similar to what they would earn in a conventional job, which matches the description of Kentucky Soup and Salad.

Question 10

In the book The Theory of Economic Development, ________ argued that entrepreneurs develop new products and technologies that over time make current products and technologies obsolete. This process is called creative destruction.

Accepted Answer

The concept of creative destruction was introduced by Joseph Schumpeter in his book The Theory of Economic Development. Choices A, B, D, and E are not associated with this concept.

Question 11

According to the textbook, entrepreneurs are:

Accepted Answer

According to the textbook, entrepreneurs are moderate risk takers. They do take risks, but they are calculated risks, meaning that they assess the potential consequences before taking any actions. Entrepreneurs also tend to look for ways to minimize risks while pursuing business opportunities. Therefore, option B is the best choice.

Question 12

According to the textbook, there are three types of startup firms:

Accepted Answer

The textbook states that the three types of startup firms are lifestyle firms, salary-substitute firms, and entrepreneurial firms.

Question 13

Which of the following statement is correct regarding entrepreneurial activity and age ranges?

Accepted Answer

According to studies, the highest percentage of entrepreneurs falls in the 20 to 34 age range. This age group is often characterized as being more innovative and risk-taking, which is essential for entrepreneurial activity. However, this doesn't mean that successful entrepreneurs cannot be found in other age ranges as well.

Question 14

At the high school and younger level, according to a Harris Interactive Survey, ________ said they'd like to start their own business someday.

Accepted Answer

According to the Harris Interactive Survey, 40% of high school and younger students expressed an interest in starting their own business someday.

Question 15

According to Chapter 1, a sentiment that venture capitalists often express is that:

Accepted Answer

Venture capitalists often emphasize the importance of the entrepreneur behind a business idea, believing that a strong entrepreneur can make a mediocre idea successful, whereas a mediocre entrepreneur might not do justice to a strong business idea.

Question 16

Which of the following was not given in the textbook as a reason for the increase in the number of senior entrepreneurs?

Accepted Answer

The textbook cited growing worries about future expenses, extensive business experience, desire for personal fulfillment, and corporate downsizing as reasons for the increase in senior entrepreneurs. However, it did not mention that seniors tend to be more passionate about new business ideas than younger entrepreneurs.

Question 17

According to Chapter 1, investors often cite the ________ as their most important criterion in the decision to fund new ventures.

Accepted Answer

The answer of According to Chapter 1, investors often cite...

Question 18

According to the textbook, there are three types of startup firms: entrepreneurial firms, lifestyle firms, and:

Accepted Answer

The correct answer is B, salary-substitute firms. Salary-substitute firms are businesses people start to replace their previous job and earn a similar income level. These firms are not necessarily entrepreneurial, meaning they are not intended to be high-growth or innovative ventures. Civil, statutory, and standard-of-living firms are not types of startup firms mentioned in the textbook. While innovative firms are a type of startup, they are included in the category of entrepreneurial firms.

Question 19

Suppose you are a Small Business Development Center counselor and you're looking at the personality profiles of five potential entrepreneurs. Based on the profiles, which individual has the most desirable mix of personal characteristics to become a successful entrepreneur?

Accepted Answer

Candidate A has a desirable mix of personal characteristics as a successful entrepreneur, with a visionary outlook, enough energy to follow through, and moderate risk-taking behavior. Being too much of a risk-taker (C and D) can lead to poor decision-making and potential failure, while seeking recognition (B and E) can distract from the focus on building a successful business. Tolerance for ambiguity (E) can be helpful, but being primarily motivated by money is not a strong indicator of long-term success as an entrepreneur.

Question 20

Which of the following is not a personality trait or characteristic common among entrepreneurs?

Accepted Answer

A short attention span is not a common personality trait among successful entrepreneurs. Rather, they tend to be focused and persistent in pursuing their goals. A, B, D, and E are all commonly cited as important traits for entrepreneurs.

Quiz 1: Introduction to Entrepreneurship