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WorksheetsPrinciples of Entrepreneurship 1st Semester Test Bank
Total questions: 109
Worksheet time: 55mins
A person who takes the risk of a business venture is
not directly affected by the consequences of his or her decisions,
an employee
an entrepreneur
sure to be successfule
A person who works for someone else is
an entrepreneur
taking the risk of business venture
an employee
one who receives the profits of the business
Manufacturing businesses
produce the products they sell
sell products directly to the people who consume them
sell services rather than products
take resources out of the ground so that they can be consumed
Which of the following is a retailing business?
Automotive repair shop
Travel agency
Grocery store
Farm
An entrepreneur who is green focuses on
helping others who are in need
operating with integrity
finding societal needs that are not being met by the government
conserving resources
About how many new businesses do not survive beyond five years?
About 10 percent
Nearly one-quarter
About half
Almost 90 percent
Which of the following is a major factor in a small business’s success?
Having adequate capital
The owner’s education level
The owner’s reason for starting the business
All of these
Researchers have determined that successful entrepreneurs
want to make their own decisions
do not always know what they want
like to have someone else make decisions
do not need to set goals
Which of the following is not a characteristic of a successful entrepreneur?
Determination
Creativity
Dependence
Self-confidence
Competency involves
being able to look at things from different perspectives
sharing ideas with others both verbally and in written form
working well with others
having the right set of skills needed to get the job done
A self-assessment is an evaluation of your
hobbies and interests
strengths and weaknesses
past job experience
ability to act quickly
To determine your suitability for entrepreneurship, you should assess your
strengths and weaknesses
interests
aptitude
all of these
Two key factors that aid an entrepreneur’s commitment to a business are
hobbies and sales experience
interests and past experiences
interests and sales experience
hobbies and athletic ability
Aptitude is the ability to
act quickly
evaluate interests
learn a particular kind of job
all of these
An advantage of entrepreneurship is that entrepreneurs
can supervise others
make all decisions by themselves
can work in a field that interests them
do not need to set goals
A disadvantage of entrepreneurship is that entrepreneurs
face irregular incomes
must make all decisions by themselves
work long hours
all of these
Possibilities that arise from existing conditions are
ideas
opportunities
dreams
goals
People who excel at their jobs
have generally learned much about their profession
see how successful marketing is conducted
know how to satisfy customer needs
all of these
The Small Business Administration (SBA)
holds trade shows
publishes information that may be helpful for small businesses
has a department in most public libraries
buys products from entrepreneurs to help them make a profit
Special meetings where companies of the same industry or related industries display their products are
trade shows
entrepreneurial conventions
job fairs
poor places to learn about opportunities
All of the following can help you determine if a business opportunity is realistic except
the rate of business failure
the market for that kind of business
the background needed to run that kind of business
the interest rates for loans at different banks
When comparing different business opportunities, an entrepreneur should
set financial goals
set nonfinancial goals
determine the hours a week needed to run the business
perform a self-assessment
Financial goals can include
the best retirement age
the monetary value of serving a community need
how much money you will earn
how many employees you will have in ten years
Nonfinancial goals are important for an entrepreneur because they
determine personal satisfaction
increase sale
guarantee success
enable a business to earn a profit
A formal problem-solving model
consists of five steps
is never necessary for everyday decisions
is used only to gather information
helps people solve problems in a logical manner
Which of the following is not a step in the decision-making process?
Identify various solutions
Take action
Evaluate the problem
Gather information
After the problem is defined and information gathered, you
try to quantify the problem
identify various solutions
make your decisions
reach a consensus
In evaluating alternatives and selecting the best option, you
gather information about each alternative
see if the selected alternative works
decide how to implement the best option
quantify or rank the alternatives
The final step in the problem-solving model is to
take action
evaluate alternatives and select the best option
evaluate the action
identify various solutions
Good communication is important in the problem-solving process because when trying to resolve problems and make decisions, you will likely need to
interact with others
request information and express your ideas
listen to suggestions from others
all of these
Brainstorming
involves discussing a large number of ideas
is used to analyze practical ideas
is a creative problem-solving technique
none of these
In a brainstorming session, you should
write down only solutions that seem practical
come up with as many ideas as possible
evaluate each idea as soon as it is proposed
always work with at least two other trusted colleagues
From an entrepreneur’s perspective, mistakes
have no place in the problem-solving process
will never be made if the problem-solving process is correctly followed
should be viewed as a learning experience
are always a negative
Needs include all of the following except
food
smartphones
basic clothing
a place to live
Things that you think you must have in order to be satisfied are called
needs
preferences
goals
wants
The psychologist who developed a theory on the hierarchy of needs was
Abraham Maslow
Sigmund Freud
Karl Jung
Terrence McKenna
According to the theory of hierarchy of needs
everyone’s needs will eventually be satisfied
people must satisfy lower-level needs before they can focus on higher-level needs
everyone has the same needs
needs and wants are usually the same
Earning a college degree is an example of satisfying which of the following areas of needs?
Esteem
Social
Self-actualization
Security
Products you can see and touch are called
services
goods
intangibles
all of these
The three types of economic resources that an entrepreneur may use to create useful goods and services are called
factors of production
economies of scale
factors of consumption
production hierarchies
Raw materials supplied by nature are
human resources
capital resources
natural resources
monetary resources
Which of the following would not be considered a capital resource?
Buildings
Equipment
The money needed to pay employees
Employees
In the U.S. economy, entrepreneurs
fulfill consumers’ wants and needs
provide employment
help change the way people live and conduct business
all of these
Which of the following is not one of the three basic questions that all economies must answer?
What goods and services will be produced?
How will the goods and services be produced?
When will the goods and services be produced?
For whom will the goods and services be produced?
In a command economy
there is very little choice for consumers in what is available
individuals may not always be able to obtain exactly what they want
the government determines what, how, and for whom goods are produced
all of these
In a market economy, individual choice
does not influence how items are produced
creates the market for a good or service
has no effect on production
creates scarcity
Today, China operates under a
mixed economy
traditional economy
market economy
command economy
The U.S. economic system is based on all of the following principles except
private property
freedom of choice
government control
competition
In the U.S. economy, competition forces a business to
improve products
keep costs low
provide good customer service
all of these
Scarcity exists because
there are different types of economies
there are too many people in the world
resources are limited
some products are expensive to produce
All of the following are a function of business except
production
management
opportunity cost
finance
All of the following are components of the marketing mix except
product
distribution
competition
price
A supply curve shows that the quantity produced
increases as price decreases
increases as price increases,
decreases as price increases
is not affected by price
A demand curve shows that the quantity consumed
increases as price decreases
increases as price increases
decreases as price decreases
is not affected by price
The fixed costs of a business
include monthly rent
are based on the price of supplies
do not include the cost of insurance
include advertising costs
When a business owner decides to grow the business he or she needs to consider the
equilibrium quantity
variable costs
marginal cost
economies of scale
Market structures are distinguished by all of the following except
the types of goods and services being traded
the amount of profit that can be earned by sellers
the barriers to entry into the market for sellers
the number and size of sellers and buyers in the market
Which of the following is not one of the four major market structures?
Perfect competition
Monopoly
Oligopoly
Pure competition
Which of the following market structures are retail stores and restaurants found in?
Oligopoly
Perfect competition
Monopolistic competition
None of these
A business plan should
explain who will supply your business with goods
how how your business will win over customers from competitors
explain who will run your business
all of these
A business plan explains how your product or service
will be produced
will be sold
is either new or better than existing products or services
all of these
Long-term sales projections are
for two to four years after startup
for five years in the future
for ten years in the future
not included in a business plan
Before lenders will loan money to a new business
hey will want to interview all potential employees
the new business must have at least two years’ worth of work already lined up
they need to be convinced that the leadership team of the business have the skills and characteristics necessary to succeed
all of these
Which of the following is not a purpose of a business plan?
To describe the backgrounds and experience of your suppliers
To explain the idea behind your business
To explain how you expect to achieve specific objectives
To describe the backgrounds and experience of the leadership team of the business
Before they will consider financing a business, lenders require
an organizational chart that lists all of your employees
a business plan
the history and background of your product
all of these
Working on a business plan helps you
think through business strategies
identify problems that you may encounter
recognize limits,
all of these
A business plan is important for all of the following reasons except
it helps you communicate your ideas to others
it helps you decide what to sell
it can help you secure financing for your business
it makes you think about all aspects of your business
The introduction section of a business plan contains all of the following except
a description of the nature of the business
the legal structure of the business
an identification of risks
the advantages your business has over your competitors
The marketing section of your plan explains
how you plan to enter the market
who your prospective customers are
how you plan to deal with competition
all of these
Which of the following is not an element of the financial management section of your plan?
Identification of risks
Distribution of profits and losses
Financial statements
Funding request and return on investment
In the financial management section of its business plan, a new business must include
projected financial statements
copies of all rental agreements
current financial statements
all of these
Information about necessary equipment for your business is included in a business plan’s
financial management section
concluding statement
marketing section
operations section
A business plan’s title page includes all of the following except
a brief description of the business
the name of the company
the date
the owner’s name
An executive summary
should be written before the business plan is completed
includes supporting documents that back up statements made in the body of the report
states how much you want to borrow
should be no longer than one or two paragraphs
The appendix of a business plan might include
tax returns of the business owner
letters of recommendation
a copy of required licenses
all of these
The SBA
is an independent agency of the federal government
provides loans and loan guarantees to entrepreneurs and small businesses
has at least one office in every U.S. state
all of these
Small Business Development Centers (SBDCs)
are often located at community and state colleges
are made up of working and retired business professionals
provide real-world advice and know-how for a small fee
all of these
SCORE is
cosponsored by the federal government
a for-profit association
an independent agency of the federal government
made up of working and retired business professionals
Trade associations provide all of the following to entrepreneurs except
valuable information
education
networking opportunities
small loans
Which of the following is least likely to be a helpful resource for your business plan?
National Geographic
books on entrepreneurship
SBA publications
Entrepreneur magazine
Online business resources
should not be used in a business plan
are not as reliable as print resources
can be found via search engines
are not available from the SBA
Financial projections in a business plan should
not be included if you could not locate reliable financial information
be based on solid evidence
be very optimistic so that investors will be impressed
based on your best guess.
Your business plan must
clearly define your market
never overlook the competition
be consistent
all of these
The customers you would most like to attract are referred to as your
competition
market segments
target market
demographics
Which of the following would most likely be the target market for a car dealer selling moderately priced minivans?
Single people with higher incomes
Middle-class families with children
People who are retired
None of these
By continually evaluating your market, you can be ready to respond to changes in all of the following except
government
communities
consumer tastes
competitors’ offerings
Most products and services appeal to
a large portion of the population
the demographic market
a market segment,
none of these
A description of the characteristics of the person or company that is likely to purchase a product or service is a
target market
customer profile
psychographic profile
demographic summary
Demographics are data that describe a group of people in terms of their
income
tastes
opinions
needs
Psychographics are data that describe a group of people in terms of their
lifestyle habits
personality traits
opinions
all of these
Data that help you determine how often potential customers use a particular service are called
geographic data
demographics
psychographics
use-based data
Data that help you determine where your potential customers live and how far they will travel to do business with you are called
use-based data
geographic data
census data
secondry data
Which of the following is not a way to collect primary data?
Focus groups
Consumer opinion blogs
Surveys
Observation
A good survey should
have easy-to-answer questions
be at least two pages long
explain in detail why you are conducting the survey
all of these.
Secondary data are found
in government publications
on the Internet
in newspapers
all of these
In the first step in the market research process, you need to
determine what data you need to collect
define the market research question
decide how you will gather data
determine how much data you will need to collect.
In designing a survey, you should consider all of the following except
length of the survey
how you plan to administer it
when you can get the best information
the purpose of each question
Customer relationship management focuses on
understanding customers as individuals
understanding customers as part of a group
identifying a target market
none of these
Which of the following is not an example of a touch point?
a product registration form
the return of a completed warranty card
a request for product information
an order of goods from a supplier
Finding hidden patterns and relationships in customer data is called data
mining
warehousing
collection
evaluation
Social media marketing
helps a company get indirect feedback from customers
is a useful but expensive way to promote a product
is a good way for companies to increase exposure
has failed to catch on because not everyone uses social media
All of the following can provide information about direct competition except
the U.S. Postal Service
the Internet
your local chamber of commerce
observation methods
Which of the following would be considered an indirect competitor of McDonald’s?
Kentucky Fried Chicken
Pizza Hut
Subway
all of these
As an entrepreneur, you may find that indirect competitors
are more difficult to locate than direct competitors
are usually located in malls or shopping centers
make most of their money selling the same or similar products or services that you sell
none of these
Small businesses may have difficulty competing with large retailers because large retailers
develop more complete customer profiles
are able to keep larger quantities of products in stock
have a larger target market
offer superior service
A competitive analysis does all of the following except
identify competitors
summarize the products and prices offered by competitors
identify threats from a competitor
research a competitor’s business plan
Competitors should be analyzed concerning their
prices
locations
strengths and weaknesses
all of these
The main purpose of customer loyalty strategies is to
obtain new customers
keep customers happy so that they return to the business
save money
none of these
All of the following are strategies designed to maintain customer loyalty except
providing store-specific credit cards
locating in a city center
having easy return policies
having more convenient hours than other businesses
