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Chapter 3 Practice

Total questions: 41

Worksheet time: 19mins

Name
Class
Date
1.
The advantage of a person becoming an entrepreneur is:
a)
more money'll always be earned than working for an employer
b)
there is more independence than when working for an employer 
c)
Less risk of business failure 
d)
no oppotunity cost involved in becoming anentepeneur
2.
An important characteristic of a successful entrepreneur is that:
a)
they are always rich
b)
they are risk takers
c)
they are usually shy
d)
they want to avoid hard work
3.
An important characteristic of a successful entrepreneur is that:
a)
they are always rich
b)
they are risk takers
c)
they are usually shy
d)
they want to avoid hard work
4.
A business plan for a new business will include all of the following except
a)
financial forecasts
b)
market research data
c)
details of the business owners
d)
previous years' accounts
5.
What benefit does drawing up a business plan bring for a new entrepreneur?
a)
it shows exactly how much money the firm will make
b)
it makes sure the bank will lend all the capital needed
c)
it means that the business start up has no risk of failure
d)
it helps in organising the resources needed for the new firm
6.
Which of the following is not an effective way of measuring the size of a business?
a)
number of employees
b)
value of sales
c)
value of capital invested
d)
profit level
7.

A good or service that is essential for living is called

a)

Want

b)

Needs

c)

Interest

d)

Desire

8.

A good or service that people would like to have, but is not required for living is called

a)

Want

b)

Needs

c)

Interest

d)

Desire

9.

Scarcity is the main economic problem. What is scarcity?

a)

It is a situation that exists when there are unlimited wants and limited resources to produce the goods and services to satisfy those wants

b)

the next best alternative forgone by choosing another item

c)

is the physical and mental efforts put in by the workers in the production process

d)

is the finance, machinery and equipment needed for the production of goods and services

10.

Which of these is the best definition of the “Economic Problem”?

a)

People do not have enough money

b)

There are not enough resources to satisfy people’s wants

c)

There are too many items

d)

There are too many factors of production

11.

Which of the following is NOT a factor of production?

a)

oil reserves

b)

factory buildings

c)

skilled labor

d)

music CDs

12.

What are the advantages being Entrepreneur?

a)

Work on your own time

b)

Implement your own ideas and decisions

c)

Work for other people

d)

Invest their own capital

13.

What are disadvantages of being entrepreneur?

a)

Work on your own time

b)

Most new businesses tend to fail

c)

Lack of expertise and knowledge

d)

Implement your own ideas and decisions

14.

What makes a successful entrepreneur

a)

Hard working

b)

Risk Taker

c)

Demotivated

d)

Effective Communicator

15.

Why Governments support start-ups

a)

Reduces unemployment by creating jobs

b)

Start-ups may fail

c)

Increased competition

d)

Not beneficial for society

16.

Government Aid to Start Ups

a)

Provide advice through experienced staff

b)

Provide low interest loans

c)

Tax Amnesty

d)

High Interest Loans

17.

Why do we need Business Plan ?

a)

Helps plan for future needs with regards to assets

b)

Most banks require a convincing Business Plan

c)

It is not helpful for entrepreneur

d)

A document that contains business objectives

18.

How to measure business size?

a)

Numbers of people employed

b)

Numbers of building

c)

Value of output

d)

Value of output

19.

Being _____ is a key characteristic of a successful entrepreneur.

a)

a risk taker

b)

a team worker

c)

unwilling to make decisions

d)

always willing to follow the advice of others

20.

A ______ is not usually one of the contents of a business plan

a)

description of the market

b)

description of the physical location

c)

job description

d)

cash flow forecast

21.

Government support business start-ups to

a)

reduce inflation

b)

reduce wage rates

c)

reduce unemployment

d)

reduce tax revenue

22.

The number of people employed and the value of ______ are two ways of measuring the size of a business

a)

profits

b)

expenses

c)

shares

d)

output

23.

_____ and is a benefit of business growing.

a)

Merging with a competitor increases market share

b)

Merging with a supplier increases costs

c)

Taking over a retail outlet is backwards vertical integration

d)

Taking over a competitor always leads to higher profit margins

24.

Entrepreneurs are always successful

a)

True

b)

False

25.

A business plan ensures a business will not fail

a)

True

b)

False

26.

Governments can help new start up businesses by offering advice and support sessions to entrepreneurs.

a)

True

b)

False

27.

A large business can have high sales but employ few workers.

a)

True

b)

False

28.

Some businesses remain small because the owner does not want it to expand.

a)

True

b)

False

29.

The total value of capital used in the business

a)

Internal growth

b)

A business plan

c)

Capital employed

d)

A reason for business failure

e)

Entrepreneur

30.
One way of overcoming the problems that often result from fast business growth is to
a)
integrate with a much larger business
b)
reduce the amount of capital invested in the business
c)
reduce communication between people to save time 
d)
operate the business in smaller units
31.
One of the most common reasons for a new business not surviving is:
a)
too much time spent on developing the business plan
b)
no competitors in the industry
c)
poor cash flow as a result of poor financial planning
d)
consumers like dealing with small firms providing a service
32.
One of the reasons for vertical integration between two businesses could be to:
a)
diversify into a completely different industry
b)
reduce competitors supplying the same product
c)
control the supply of raw material
d)
obtain higher market share
33.
Which of the following is an example of horizontal integration between two businesses?
a)
An oil company and an insurance company merge
b)
A shoe shop buys out a shoe factory
c)
A steel firm takes over a coal mine that supplies coal
d)
Coca-Cola takes over a small soft drink business
34.
Which of the following options is most likely to be a reason why a firm may wish to expand?
a)
To keep control of the business
b)
To increase the level of profits the firm will make
c)
To encourage competition
d)
To avoid publicity
35.
Which of the following is not an effective way of measuring the size of a business?
a)
number of employees
b)
value of sales
c)
value of capital invested
d)
profit level
36.
What benefit does drawing up a business plan bring for a new entrepreneur?
a)
it shows exactly how much money the firm will make
b)
it makes sure the bank will lend all the capital needed
c)
it means that the business start up has no risk of failure
d)
it helps in organising the resources needed for the new firm
37.

Takeover: when a company buys more than ____ of the shares of another company and becomes the controlling owner of it

a)

60%

b)

30%

c)

40%

d)

50%

38.

"integration with a business in the same industry but a customer of the existing business" is the definition of?

a)

Horizontal integration

b)

Vertical backward integration

c)

Vertical forward integration

d)

Conglomerate integration

39.

"having control supplies of materials to competitors" is an important advantage of ?

a)

Horizontal integration

b)

Vertical forward integration

c)

Conglomerate integration

d)

Vertical backward integration

40.

Which of the following is not an example of organic growth?

a)

Developing new products

b)

Merging with another company

c)

Selling your products to a different market

41.

Horizontal integration is...

a)

When 2 companies in the same industry at the same stage of production join e.g. H&M and Zara

b)

When 2 companies in the same industry at different stages of production join e.g. H&M and a textiles factory

c)

When 2 companies in different industries join e.g. H&M and Costa

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