Copyright 2015 Pearson Education, Inc.

1 Copyright © 2015 Pearson Education, Inc.Entrepreneurship and Effective Small Business Management, 11e (Scarborough)

Chapter 1 Entrepreneurs: The Driving Force Behind Small Business

1) The nation is rapidly moving from:

• industrial to capitalism.
• capitalism to industrial.
• industrial to knowledge-based.
• None of the above

Answer: C

Page Ref: 4

Topic: Introduction

AACSB: Communication

2) Which of the following corporate trends have contributed to the growth of entrepreneurship?

• The acquisition and merging of mega corporations
• The idea that "small is beautiful" in large companies, resulting in less hierarchy and layers of

management

• The flood of venture capital being made available to small businesses
• The downturn in international markets forcing a focus on the domestic market

Answer: B

Page Ref: 3

Topic: Introduction

AACSB: Communication

3) The following is true regarding entrepreneurial education:

• entrepreneurship has become an extremely popular course.
• universities are not able to meet the demand for courses in entrepreneurship.
• more courses are being offered in entrepreneurship.
• All of the above

Answer: D

Page Ref: 17

Topic: Why the Boom: The Fuel Feeding the Entrepreneurial Fire

AACSB: Communication

4) Researchers who study entrepreneurs have discovered that:

• successful entrepreneurs start with an idea, resources, and a small management team.
• there is one key set of traits that mark a successful entrepreneur.
• entrepreneurs desire responsibility and are willing to take moderate risks.
• the most successful entrepreneurs are willing to take extreme risks and bet the farm in order

to succeed.

Answer: C

Page Ref: 5

Topic: What is an Entrepreneur?

AACSB: Multicultural and Diversity

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2 Copyright © 2015 Pearson Education, Inc.5) Dirk wants to be in control. He's tired of taking orders from others and wants to feel a sense of accountability for the outcome of his work. Dirk displays the entrepreneurial characteristic of:

• the desire for immediate feedback.
• a desire for responsibility.
• confidence in his ability to succeed.
• a high energy level.

Answer: A

Page Ref: 7

Topic: What is an Entrepreneur?

AACSB: Analytic Skills

6) Entrepreneurs seem to be characterized by:

• a desire for money.
• an inability to organize but strong conceptual skills.
• a desire to work alone because of weak management skills and a need for control.
• a high energy level.

Answer: D

Page Ref: 7

Topic: What is an Entrepreneur?

AACSB: Reflective Thinking

7) Juan is able to work well in a constantly changing atmosphere and has little concern for what tomorrow will bring. Juan demonstrates which of the following characteristics of a typical entrepreneur?

• The willingness to take extreme risks
• A desire for immediate feedback
• A tolerance for ambiguity
• A future orientation

Answer: C

Page Ref: 8

Topic: What is an Entrepreneur?

AACSB: Analytic Skills

8) Entrepreneurs start businesses for a number of reasons including:

• an opportunity to make a difference.
• having to deal with less government regulation than as an executive of a large company.
• a much lower risk of career failure due to layoff or acquisition than working for a large

company.

• the opportunity to get rich much quicker than if they work for a large company.

Answer: A

Page Ref: 13

Topic: The Benefits of Owning a Small Business

AACSB: Reflective Thinking

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9) Surveys show that owners of small businesses believe that:

• they work harder on their own than if they worked for someone else.
• they earn less than if they worked for someone else.
• they are less satisfied than if they worked for someone else.
• venture capital is relatively easy to raise.

Answer: A

Page Ref: 15

Topic: The Benefits of Owning a Small Business

AACSB: Communication

10) A significant benefit of starting your own company is:

• more leisure time because there is less of a need to punch a time clock.
• contributing to society and being recognized for your efforts.
• to be able to choose who you work with or don't work with.
• more job security than working for a large corporation.

Answer: B

Page Ref: 14

Topic: The Benefits of Owning a Small Business

AACSB: Communication

11) Kyoto has started an interior decoration business. Everything about the business, from its name to the color schemes used in the corporate letterhead, is an expression of her personality.She sees this business as her greatest personal achievement. Kyoto is experiencing the opportunity ________ of small business ownership.

• to reap unlimited profits
• to contribute to society
• to make a difference
• to reach her full potential

Answer: D

Page Ref: 14

Topic: The Benefits of Owning a Small Business

AACSB: Analytic Skills

12) Mary and Ted are discussing starting a new business and are asking themselves a series of questions like; "What is the worst that could happen if we fail?" "How likely is that to happen?" They are assessing which potential drawback of small business ownership?

• The long hours and hard work involved
• The risk of losing their entire investment
• The lower quality of life they'll experience
• The uncertainty of their income

Answer: B

Page Ref: 15

Topic: The Potential Drawbacks of Entrepreneurship

AACSB: Analytic Skills

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13) Potential drawbacks of small business ownership include:

• a relatively low guaranteed income.
• a significantly freer personal schedule but less personal income and assets with which to

enjoy the more relaxed schedule.

• a high likelihood of a lower quality of life while starting and establishing the small business.
• relatively limited potential for further personal development.

Answer: C

Page Ref: 16

Topic: The Potential Drawbacks of Entrepreneurship

AACSB: Communication

14) Around the world, the most successful entrepreneurs have ________ status.

• villain
• hero
• profiteer
• shirker

Answer: B

Page Ref: 17

Topic: Why the Boom: The Fuel Feeding the Entrepreneurial Fire

AACSB: Reflective Thinking

15) Which of the following trends is feeding the growth of entrepreneurial activity?

• A greater focus on professional advancement combined with the "flattening" of large

corporations' management hierarchies

• The rapid growth of the need for low-technology products
• A favorable attitude toward entrepreneurs in American society
• Diminished wage increases in corporations and the desire for a better standard of living

Answer: C

Page Ref: 17

Topic: Why the Boom: The Fuel Feeding the Entrepreneurial Fire

AACSB: Reflective Thinking

16) The growth of entrepreneurship is being fed by:

• the return to a manufacturing-based economy.
• technological advancements.
• diminished opportunities in overseas markets for larger corporations.
• the vilifying of large corporations in society.

Answer: B

Page Ref: 17

Topic: Why the Boom: The Fuel Feeding the Entrepreneurial Fire

AACSB: Communication

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