Question 1

The primary objective of an entrepreneurial venture is to
A)provide non-profit services.
B)create a stable small business.
C)reduce the amount of dividends paid.
D)acquire growth and high profitability.
E)increase the social capital.

Accepted Answer

An entrepreneurial venture has growth and high profitability as primary objectives. Entrepreneurs manage aggressively and develop innovative strategies, practices, and products.

Question 2

_____ is a competitive advantage that exists in your relationships with other people and the image other people have of you.
A)Value-added production
B)Business economics
C)Affiliation
D)Entrepreneurial orientation
E)Social capital

Accepted Answer

Social capital is a competitive advantage in the form of relationships with other people and the image other people have of you. Social capital helps entrepreneurs gain access to useful information, gain trust and cooperation from others, recruit employees, form successful business alliances, receive funding from venture capitalists, and become more successful.

Question 3

One of the most common reasons that entrepreneurial ventures fail is
A)a lack of adequate start-up capital.
B)improperly spending start-up capital.
C)not buying the highest-quality equipment.
D)tying spending too closely to revenues.
E)the unpredictability of the stock market.

Accepted Answer

Failure resulting from a lack of financial resources doesn't necessarily indicate a real lack of money; it could mean a failure to use the available money properly. Entrepreneurs who fail to use their resources wisely usually make one of two mistakes: They apply financial resources to the wrong uses, or they maintain inadequate control over their resources.

Question 4

Which of the following e-commerce models has advertisers pay for access to the demographic group that visits the operator's site?
A)Affiliate
B)Intermediary
C)Advertising support
D)Subscription
E)Transaction fee

Accepted Answer

With Internet commerce, as with any start-up, entrepreneurs need sound business models and practices. In the advertising support model for e-commerce, advertisers pay the site operator to gain access to the demographic group that visits the operator's site.

Question 5

_____ occurs when an enterprising individual pursues a lucrative opportunity.
A)Bootlegging
B)Franchising
C)Intrapreneurship
D)Entrepreneurship
E)Business incubation

Accepted Answer

Entrepreneurship occurs when an enterprising individual pursues a lucrative opportunity. To be an entrepreneur is to initiate and build an organization rather than being only a passive part of one.

Question 6

Which of the following e-commerce models are online newspapers most likely to use?
A)Affiliate
B)Intermediary
C)Advertising support
D)Subscription
E)Transaction fee

Accepted Answer

Newspapers and magazines are good examples of websites that use the subscription model. Many charge a monthly or annual fee for website visits or access to website content.

Question 7

YouChuse is on online business that allows people to upload their original artwork to be imprinted on cards and calendars, which are then offered for sale. What e-commerce model is YouChuse most likely using?
A)Affiliate
B)Intermediary
C)Advertising support
D)Subscription
E)Transaction fee

Accepted Answer

With the affiliate model, sites pay commissions to other sites to drive business to their own sites. Zazzle.com, Spreadshirt.com, and CafePress.com are variations on this model. They sell customer-decorated gift items. Designers are the affiliates; they choose basic, undecorated products and add their own designs, creating the customized products offered to consumers.

Question 8

Which of the following online businesses is the most likely to use the transaction fee model?
A)A newspaper
B)A specialized encyclopedia
C)A do-it-yourself auction site
D)A clothing retailer
E)A search engine

Accepted Answer

In the transaction fee model, companies charge a fee for goods or services. Amazon.com and online travel agents are primary examples.

Question 9

Entrepreneurs manage _____ and develop _____ strategies, practices, and products.
A)conservatively; innovative
B)conservatively; imitative
C)conservatively; traditional
D)aggressively; innovative
E)aggressively; imitative

Accepted Answer

An entrepreneurial venture has growth and high profitability as primary objectives. Entrepreneurs manage aggressively and develop innovative strategies, practices, and products.

Question 10

Protected environments for new, small business are known as _____.
A)business incubators
B)business accelerators
C)business shelters
D)skunkworks
E)bootleggers

Accepted Answer

Business incubators are protected environments for new, small businesses. Incubators offer benefits such as low rents and shared costs. Shared staff costs, such as for receptionists and secretaries, avoid the expense of full-time employees but provide convenient access to services.

Question 11

People who have an entrepreneurial orientation tend to
A)be cautious.
B)innovate.
C)be reactive.
D)avoid aggression.
E)be dependent.

Accepted Answer

Entrepreneurial orientation is determined by five tendencies: to allow independent action, innovate, take risks, be proactive, and be competitively aggressive.

Question 12

A(n) _____ is an innovator who has created at least one successful store and seeks partners to operate the same concept in other local markets.
A)franchisor
B)franchisee
C)bootlegger
D)intrapreneur
E)ally

Accepted Answer

The franchisor is an innovator who has created at least one successful store and seeks partners, called franchisees, to operate the same concept in other local markets. For the franchisor, the opportunity lies in wealth creation through growth.

Question 13

If a business's goals and methods are consistent with societal values, it is considered _____.
A)legitimate
B)competitive
C)conventional
D)reactionary
E)cooperative

Accepted Answer

Legitimacy is people's judgment of a company's acceptance, appropriateness, and desirability, generally stemming from company goals and methods that are consistent with societal values. A business is legitimate if its goals and methods are consistent with societal values.

Question 14

_____ are project teams designated to produce new, innovative products.
A)Bootleggers
B)Skunkworks
C)Intrapreneurs
D)Affiliates
E)Incubators

Accepted Answer

Skunkworks are project teams designated to produce a new product. A team is formed with a specific goal within a specified time frame. In this approach to corporate innovation, risk takers are not punished for taking risks and failing; their former jobs are held for them.

Question 15

Initial public stock offerings provide a way to raise capital through
A)offering a partnership to someone with a lot of money to invest.
B)the unadvertised sale of stock to acquaintances and friends of the owner.
C)the merger of two different companies that agree to share ownership.
D)federally registered and underwritten sales of shares in the company.
E)the purchase of one company by another that is usually larger and better funded.

Accepted Answer

Sometimes companies reach a point at which the owners want to "go public." Initial public stock offerings (IPOs) offer a way to raise capital through federally registered and underwritten sales of shares in the company.

Question 16

Which of the following online businesses uses the intermediary model of e-commerce?
A)eBay
B)iTunes
C)Google
D)Travelocity
E)Amazon

Accepted Answer

The intermediary model, which is used by eBay, brings buyers and sellers together and charges a commission for each sale.

Question 17

Anshul worked as an engineer for FuturTech. He had many innovative ideas for the company, but most were never explored to his satisfaction. Therefore, he left the corporation to start his own business. He applied his ideas and thoughts to this business and finally succeeded. This is an example of ____.
A)entrepreneurship
B)domain selection
C)corporate espionage
D)vertical integration
E)franchising

Accepted Answer

Entrepreneurship occurs when an enterprising individual pursues a lucrative opportunity. It involves creating new systems, resources, or processes to produce new goods or services and/or serve new markets.

Question 18

A business having fewer than 100 employees, independently owned and operated, not dominant in its field, and not characterized by many innovative practices is a(n)
A)matrix venture.
B)small business.
C)franchise.
D)entrepreneurial venture.
E)consortium.

Accepted Answer

A small business is often defined as having fewer than 100 employees, being independently owned and operated, not dominant in its field, and not characterized by many innovative practices. Small business owners tend not to manage particularly aggressively, and they expect normal, moderate sales, profits, and growth.

Question 19

Serena prepares a document that outlines her plan to open a new candy company, including descriptions of the product, the market, her strategies, and the future direction she envisions for the company. This document is a(n) _____.
A)entrepreneurial orientation
B)opportunity analysis
C)business incubator
D)initial public offering
E)business plan

Accepted Answer

The business plan describes all the elements involved in starting the new venture. The business plan describes the venture and its market, strategies, and future directions. It often has functional plans for marketing, finance, manufacturing, and human resources.

Question 20

Two major liabilities of start-ups are
A)newness and complexity.
B)newness and smallness.
C)oversaturation and smallness.
D)oversaturation and inexperience.
E)inexperience and complexity.

Accepted Answer

Start-ups have at least two major liabilities: newness and smallness. New companies are relatively unknown and need to learn how to be better than established competitors at something that customers value. Regarding smallness, the odds of surviving improve if the venture reaches a critical mass of at least 10 or 20 people, has revenues of $2 million or $3 million, and is pursuing opportunities with growth potential.

Quiz 7: Entrepreneurship

The primary objective of an entrepreneurial venture is to

_____ is a competitive advantage that exists in your relationships with other people and the image other people have of you.

One of the most common reasons that entrepreneurial ventures fail is

Which of the following e-commerce models has advertisers pay for access to the demographic group that visits the operator's site?

_____ occurs when an enterprising individual pursues a lucrative opportunity.

Which of the following e-commerce models are online newspapers most likely to use?

YouChuse is on online business that allows people to upload their original artwork to be imprinted on cards and calendars, which are then offered for sale. What e-commerce model is YouChuse most likely using?

Which of the following online businesses is the most likely to use the transaction fee model?

Entrepreneurs manage _ and develop _ strategies, practices, and products.

Protected environments for new, small business are known as _____.

People who have an entrepreneurial orientation tend to

A(n) _____ is an innovator who has created at least one successful store and seeks partners to operate the same concept in other local markets.

If a business's goals and methods are consistent with societal values, it is considered _____.

_____ are project teams designated to produce new, innovative products.

Initial public stock offerings provide a way to raise capital through

Which of the following online businesses uses the intermediary model of e-commerce?

A business having fewer than 100 employees, independently owned and operated, not dominant in its field, and not characterized by many innovative practices is a(n)

Serena prepares a document that outlines her plan to open a new candy company, including descriptions of the product, the market, her strategies, and the future direction she envisions for the company. This document is a(n) _____.

Two major liabilities of start-ups are