Copyright 2016 Pearson Education, Inc.

1 Copyright © 2016 Pearson Education, Inc.Essentials of Entrepreneurship and Small Business Management, 8e (Scarborough) Chapter 1 The Foundations of Entrepreneurship

1) One of the most significant economic developments in recent business history relates to the

________.

• growth of blue-chip corporations
• development of Pacific Rim countries
• entrepreneurial spirit
• additional employment opportunities offered by government institutions

Answer: C

Diff: 1

AACSB: Reflective Thinking

Learning Obj: 1-1 Define the role of the entrepreneur in business in the United States and around the world.

2) The recent number of job losses in large corporations compared to the jobs created by small business has changed the perception of ________ for launching a new business.

• prestige
• risk
• financing opportunities
• short-term potential

Answer: B

Diff: 2

AACSB: Reflective Thinking

Learning Obj: 1-1 Define the role of the entrepreneur in business in the United States and around the world.

3) Globally, one in eight adults is actively engaged in launching a business.

Answer: TRUE

Diff: 1

AACSB: Analytical Thinking

Learning Obj: 1-1 Define the role of the entrepreneur in business in the United States and around the world.

4) Current competitive conditions favor large companies over smaller ones because of their flexibility combined with their ability to use their size to achieve efficiency and economies of scale.

Answer: FALSE

Diff: 1

AACSB: Analytical Thinking

Learning Obj: 1-1 Define the role of the entrepreneur in business in the United States and around the world.

(Essentials of Entrepreneurship and Small Business Management 8e Norman Scarborough ) (Test Bank all Chapters) 1 / 4

2 Copyright © 2016 Pearson Education, Inc.5) Increased entrepreneurial activity is a phenomenon unique to the U.S.

Answer: FALSE

Diff: 1

AACSB: Analytical Thinking

Learning Obj: 1-1 Define the role of the entrepreneur in business in the United States and around the world.6) One study conducted by the Global Entrepreneurship Monitor (GEM) reports that nearly one in eight people in the United States is working to start a business.

Answer: TRUE

Diff: 2

AACSB: Analytical Thinking

Learning Obj: 1-1 Define the role of the entrepreneur in business in the United States and around the world.

7) The profile of an entrepreneur includes ________.

• a desire for responsibility and moderate risk
• confidence in the ability to succeed and determination
• a high level of energy, a desire for immediate feedback and a future orientation
• All the above

Answer: D

Diff: 1

AACSB: Reflective Thinking

Learning Obj: 1-2 Describe the entrepreneurial profile.

8) An entrepreneur is one who ________.

• is willing to attempt to implement a business concept and then give up if it does not meet

immediate expectations

• understands the process of developing an idea and does not need to understand what it means

to bring that idea to a viable business concept

• knows that the concept they are about to develop will result in a profitable business
• creates a new business concept for the purpose of achieving profit and growth by assembling

the necessary resources to capitalize on identified opportunities

Answer: D

Diff: 1

AACSB: Analytical Thinking

Learning Obj: 1-2 Describe the entrepreneurial profile.

9) All of the following are characteristics of the typical entrepreneur except ________.

• confidence in his/her ability to succeed
• value of money over achievement
• desire for immediate feedback
• a future orientation

Answer: B

Diff: 1

AACSB: Reflective Thinking

Learning Obj: 1-2 Describe the entrepreneurial profile. 2 / 4

3 Copyright © 2016 Pearson Education, Inc.

10) Entrepreneurs are characterized by ________.

• skill at organizing
• desire for immediate feedback
• high energy levels
• All of the above

Answer: D

Diff: 1

AACSB: Reflective Thinking

Learning Obj: 1-2 Describe the entrepreneurial profile.

11) Entrepreneurs who repeatedly start businesses and grow to a sustainable size before striking out again are known as ________ entrepreneurs.

• opportunistic
• persistent
• serial
• classic

Answer: C

Diff: 1

AACSB: Reflective Thinking

Learning Obj: 1-2 Describe the entrepreneurial profile.

12) Entrepreneurs typically possess ________.

• the ability to easily access capital
• a set of unique skills that is usually accompanied by advanced degrees in several areas
• a high level of commitment, have a tolerance for ambiguity, are flexible and tenacious
• specialized technical abilities

Answer: C

Diff: 2

AACSB: Reflective Thinking

Learning Obj: 1-2 Describe the entrepreneurial profile.

13) Entrepreneurs who start businesses because they cannot find work any other way are

________.

• necessity entrepreneurs
• serial entrepreneurs
• opportunity entrepreneurs
• corporate cast-offs

Answer: A

Diff: 1

AACSB: Reflective Thinking

Learning Obj: 1-2 Describe the entrepreneurial profile.

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4 Copyright © 2016 Pearson Education, Inc.14) Research has isolated a set of characteristics that can predict who will succeed as an entrepreneur.

Answer: FALSE

Diff: 2

AACSB: Diverse and Multicultural Work Environments

Learning Obj: 1-2 Describe the entrepreneurial profile.

15) Serial entrepreneurs repeatedly start businesses and grow them to a sustainable size before striking out again.

Answer: TRUE

Diff: 1

AACSB: Analytical Thinking

Learning Obj: 1-2 Describe the entrepreneurial profile.

16) Surveys show that small business owners believe that, as entrepreneurs, they work harder, earn more money, and are happier than if they worked for a large company.

Answer: TRUE

Diff: 2

AACSB: Reflective Thinking

Learning Obj: 1-2 Describe the entrepreneurial profile.

17) The opportunity to reap impressive profits is the primary motivation for most entrepreneurs.

Answer: FALSE

Diff: 2

AACSB: Reflective Thinking

Learning Obj: 1-2 Describe the entrepreneurial profile.

18) What is an entrepreneur? Give a brief profile of a typical entrepreneur. What is the primary motivation for the typical entrepreneur?Answer: An entrepreneur is someone who creates a new business in the face of risk and uncertainty for the purpose of achieving profit and growth by identifying opportunities and assembling the necessary resources to capitalize on them.

While entrepreneurs tend to exhibit no isolated set of required traits, an entrepreneurial profile

contains the following characteristics:

∙ Desire for responsibility ∙ Preference for moderate risk ∙ Confidence in their ability to succeed ∙ Desire for immediate feedback ∙ High level of energy ∙ Future orientation ∙ Skill at organizing Entrepreneurs are motivated most by a desire to control their own destiny, reach their own potential, make a difference, reap unlimited profits, and enjoy what they are doing.

Diff: 3

AACSB: Reflective Thinking

Learning Obj: 1-2 Describe the entrepreneurial profile.

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