Entrepreneurship and Innovation Test
Bank
Course Introduction
Entrepreneurship and Innovation explores the foundational concepts, strategies, and practices needed to turn creative ideas into viable business opportunities. The course covers key topics such as opportunity recognition, business model development, startup financing, and innovation management. Students will analyze real-world case studies, engage in team projects, and develop entrepreneurial mindsets to navigate challenges in dynamic markets. Emphasis is placed on fostering creativity, resilience, and leadership skills essential for launching and sustaining innovative ventures in today's rapidly evolving global economy.
Recommended Textbook
Essentials of Entrepreneurship and Small Business Management 9th Edition by Norman
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17 Chapters
1957 Verified Questions
1957 Flashcards
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Page 2
M. Scarborough
Chapter 1: The Foundations of Entrepreneurship
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117 Verified Questions
117 Flashcards
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Sample Questions
Q1) According to the U.S. Small Business Administration, a common delineation of a small business is one that employs fewer than ________ people.
A)50
B)100
C)250
D)500
Answer: B
Q2) Entrepreneurs are not willing to give up a steady paycheck.
A)True
B)False Answer: False
Q3) The faster a small company grows, the greater its appetite for cash.
A)True
B)False
Answer: True
Q4) Globally, one in eight adults is actively engaged in launching a business.
A)True
B)False Answer: True
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Chapter 2: Ethics and Social Responsibility: Doing the Right Thing
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109 Verified Questions
109 Flashcards
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Sample Questions
Q1) Ethical behavior is doing what is "right."
A)True
B)False
Answer: True
Q2) ________ entrepreneurs are finding the resources to tackle challenging problems such as habitat destruction, AIDS, hunger, and poverty.
A)Serial
B)Social
C)Most
D)All of the above
Answer: B
Q3) A company credo offers general guidance in ethical issues.
A)True
B)False
Answer: True
Q4) Employees are at the heart of increases in productivity.
A)True
B)False
Answer: True
Page 4
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Chapter 3: Creativity and Innovation: Keys to Entrepreneurial Success
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118 Verified Questions
118 Flashcards
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Sample Questions
Q1) All of the following represent barriers to creativity that entrepreneurs impose upon themselves except ________.
A)focusing on being too logical
B)being too practical
C)blindly following rules
D)searching for more than one answer
Answer: D
Q2) Conventional wisdom held that a person is either creative or not.
A)True
B)False
Answer: True
Q3) Employees must be given the tools and resources they need to be creative. One of the most valuable set of resources is ________.
A)setting limits and providing challenges
B)establishing rules and guidelines
C)time, support and encouragement
D)reinforce traditional problem solving methods
Answer: C
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Chapter 4: Conducting a Feasibility Analysis and Designing a Business Model
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112 Verified Questions
112 Flashcards
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Sample Questions
Q1) Porter's five forces model only considers direct competitors within a single industry.
A)True
B)False
Q2) Generally, an industry is more attractive when ________.
A)the number of competitors is large
B)competitors are similar in size
C)the industry is growing at a fast pace
D)the opportunity to sell a differentiated product or service is present
Q3) How does primary research differ from secondary research?
Q4) Time out of cash is relevant to ________ analysis.
A)strategic
B)business model
C)business plan
D)financial feasibility
Q5) The greater the leverage suppliers of key raw materials or components have, the less attractive is the industry.
A)True
B)False
Q6) Explain the concept of a value proposition as per the Business Model Canvas.
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Chapter 5: Crafting a Business Plan and Building a Solid Strategic Plan
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129 Verified Questions
129 Flashcards
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Sample Questions
Q1) A small business owner can collect a great deal of information about competitors through a number of low-cost competitive intelligence methods.
A)True
B)False
Q2) A competitive profile matrix ________.
A)identifies a firm's core competencies
B)permits the small business owner to divide a mass market into smaller, more manageable segments
C)allows the small business owner to evaluate her/his firm against competitors on the key success factors for the industry
D)creates a road map of action for the entrepreneur to fulfill her/his company's mission, goals, and objectives
Q3) Small companies' core competencies are often the result of benefits such as agility, speed, closeness to customers, superior service, and innovative ability - all of which are size advantages that allow them to do things that their larger competitors cannot.
A)True
B)False
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Page 7
Chapter 6: Forms of Business Ownership
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83 Verified Questions
83 Flashcards
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Sample Questions
Q1) The average cost to create a legal business entity is ________.
A)$2,000
B)$1,000
C)$500
D)$5,000
Q2) In a partnership, the business itself is subject to federal income tax.
A)True
B)False
Q3) Outline the incorporation process.
Q4) Which of the following statement(s)is/are true?
A)Closely held corporations are owned by only a few shareholders - often family members.
B)Most closely held corporations require shareholders interested in selling their stock to offer it first to the corporation. This is known as the right of first refusal.
C)Shares of stock the corporation itself owns are called treasury stock.
D)All of the above
Q5) Should Duke incorporate or should he remain a proprietorship? Why?
Q6) What factors should an entrepreneur consider when choosing a form of ownership?
Q7) Would a limited liability corporation be any better for Duke? Why or why not?
Page 8
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Chapter 7: Buying an Existing Business
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80 Verified Questions
80 Flashcards
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Sample Questions
Q1) The due diligence process in analyzing and evaluating an existing business can be just as time consuming as the development of a comprehensive business plan for a start-up.
A)True
B)False
Q2) One of the closing documents required is the non-disclosure agreement (NDA).
A)True
B)False
Q3) Once the deal stage is complete, the transition stage begins with the actual closing of the purchase.
A)True
B)False
Q4) The old saying "the devil is in the details" holds true when buying a business.
A)True
B)False
Q5) ________ is what a business is actually worth.
A)Price
B)Goodwill
C)Equity
D)Value
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Chapter 8: Franchising and the Entrepreneur
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69 Verified Questions
69 Flashcards
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Sample Questions
Q1) Most franchisees are better educated, more sophisticated, have more business acumen, and are more financially secure than those of just 20 years ago.
A)True
B)False
Q2) Chris Jaffe, the owner of a small independent doughnut shop, is worried that a large doughnut franchise will open an outlet near her location and take away business. Taking a proactive approach, Jaffe contacts the franchise, and after a few months of negotiations, becomes a franchisee. Jaffe is an example of which trend in franchising?
A)Cobranding
B)Conversion
C)Master
D)Subfranchising
Q3) One of the major trends in franchising is the ________ of American franchise systems.
A)replication
B)conversion
C)internationalization
D)reduction
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10
Chapter 9: Building a Powerful Bootstrap Marketing Plan
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117 Verified Questions
117 Flashcards
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Sample Questions
Q1) The best companies seek to go beyond customer satisfaction, striving for customer
A)automation
B)aggrandizement
C)apprehension
D)astonishment
Q2) Which of the following statements concerning marketing research is false?
A)Market research is the vehicle for gathering the information that serves as the foundation for the company's marketing plan, helps avoid costly marketing mistakes, and can uncover unmet customer needs the business can serve.
B)Market research involves systematically collecting, analyzing, and interpreting data pertaining to the small company's market, customers, and competitors.
C)Small companies are at a distinct disadvantage compared to larger ones when conducting market research since it is so expensive.
D)Small businesses cannot afford to miss their target markets and market research can help them focus their efforts.
Q3) How can Marvin develop "stellar" customer service?
Q4) What marketing potential does the Internet offer small business owners?
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Chapter 10: E-Commerce and the Entrepreneur
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142 Verified Questions
142 Flashcards
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Sample Questions
Q1) More than ________ percent of the world's online population has used the Internet to make a purchase.
A)46.6
B)50.8
C)51.5
D)61.2
Q2) Successful e-tailers have discovered that these factors enhance their reputations for online customer service ________.
A)comprehensive FAQ pages and e-mail order confirmation with shipment notices
B)visible telephone and e-mail contact information
C)quick responses to questions with meaningful information
D)All of these factors enhance a Web-based reputation.
Q3) The purchase funnel identifies ways to improve the online shopping experience. The process begins with ________ and ends with ________.
A)promoting an online presence; a streamlined checkout process
B)making the site easy to find; a streamlined checkout process
C)promoting the URL; a purchase
D)creating customer confidence; the payment process
Q4) How might a Web site benefit the youth club?
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Chapter 11: Pricing and Credit Strategies
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114 Verified Questions
114 Flashcards
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Sample Questions
Q1) Explain the difference between absorption costing and variable (or direct)costing. Which one is more useful when establishing prices? Why?
Q2) Generally, entrepreneurs should avoid head-to-head price competition with other firms that can more easily achieve lower prices through ________.
A)offering lower value products and services
B)a better designed Web site
C)geographic advantages
D)lower cost structures
Q3) Ultimately, the "right" price for a product or service depends on one factor________.
A)the lowest price possible
B)premium prices
C)the value that it provides for a customer
D)the most effective advertising campaign
Q4) Life cycle pricing is a short-term pricing strategy that assumes that competition will eventually emerge and the price will be lowered.
A)True
B)False
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Chapter 12: Creating a Successful Financial Plan
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140 Verified Questions
140 Flashcards
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Sample Questions
Q1) Cost of goods sold is located on which financial statement?
A)Income statement
B)Balance sheet
C)Statement of cash flows
D)All of the above
Q2) Concerning how much cash to have at startup, one rule of thumb is to have enough to cover operating expenses (less depreciation)for two inventory turnover periods.
A)True
B)False
Q3) A company with a low debt-to-net worth ratio has less capacity to borrow than a company with a high debt-to-net worth ratio.
A)True
B)False
Q4) Which of the following is not a liquidity ratio?
A)Current ratio
B)Total asset turnover ratio
C)Quick ratio
D)None of the above
Q5) Create a break-even chart for Harry.
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Chapter 13: Managing Cash Flow
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144 Verified Questions
144 Flashcards
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Sample Questions
Q1) Identify the "big three" of cash management. As a small business consultant, what would you recommend your clients do to control the "big three" more effectively?
Q2) Why is cash a unique asset? What are the advantages of efficient cash management?
Q3) Patel Industries recently filled an order from one of its customers, Oxmoor Gardens, a small garden supply store. Oxmoor's owner recently received an invoice from Patel for $1,278.64 with selling terms of "2/10, Net 30." Therefore, ________.
A)the selling terms indicate that Oxmoor must pay 2 percent of the invoice by the 10th day of the month with the balance due in 30 days
B)the selling terms are offering Oxmoor a 2 percent discount if the bill is paid within 10 days; otherwise the full amount of the invoice is due in 30 days
C)the selling terms indicate that the full amount of the invoice is due within 30 days and Oxmoor will be subject to a 2 percent finance charge for every 10 days that the bill is past due
D)the selling terms indicate that Oxmoor has not yet qualified for a quantity discount and must pay the full amount of the invoice within 30 days
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Chapter 14: Choosing the Right Location and Layout
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114 Verified Questions
114 Flashcards
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Sample Questions
Q1) The central business district (CBD)________.
A)is the traditional center of town
B)in many cities experienced decay in years past as customers began shopping more frequently at malls and shopping centers, but are now going through revitalization programs
C)attracts customers from the entire trading area of the city
D)All of the above
Q2) The typical ________ is relatively small (contains from 3 to 12 stores)and serves a population that lives within a 10-minute drive.
A)neighborhood shopping center
B)community shopping center
C)regional shopping mall
D)central business district
Q3) What is a business incubator? What can an incubator offer an entrepreneur just starting out?
Q4) What are the advantages and disadvantages of the restaurant's current location?
Q5) Identify and explain five of the eight criteria a small business owner should consider when selecting the state in which to locate her/his business.
Q6) List and explain the main location criteria for retail and service businesses.
Page 16
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Chapter 15: Sources of Financing: Equity and Debt
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117 Verified Questions
117 Flashcards
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Sample Questions
Q1) Private investors, or angels, seek 60 to 75 percent annual return on investment, which is much higher than those of professional venture capitalists, and tend to take a 51 percent share of the business.
A)True
B)False
Q2) The Global Entrepreneurship Monitor reports that the average amount of capital that entrepreneurs use to start small businesses is between ________ and ________.
A)$25,000; $28,000
B)$50,000; $62,000
C)$15,000; $22,000
D)$100,000; $114,000
Q3) Private investors look to earn the return on their investments in a business through the increased value of the business, not through dividends and interest.
A)True
B)False
Q4) Your text describes a variety of common sources of equity capital. Outline and briefly describe five.
Q5) What other sources of capital would you suggest that Christine explore?
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Chapter 16: Global Aspects of Entrepreneurship
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133 Verified Questions
133 Flashcards
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Sample Questions
Q1) Small companies that take the plunge into global business can extend their products' life cycles, raise their quality levels, and increase sales and profits.
A)True
B)False
Q2) Foreign licensing has its greatest potential in the licensing of ________.
A)products
B)intangibles (e.g., technology, copyrights, and trademarks)
C)goods
D)franchises
Q3) NAFTA is an agreement among the U.S., Canada, Mexico, Argentina, and Chile, forming a free trade area among these countries.
A)True
B)False
Q4) One reason joint ventures fail is because entrepreneurs did not select a partner who shares their company's values and standards of conduct.
A)True
B)False
Q5) Identify and discuss the international barriers to trade.
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Chapter 17: Building a New Venture Team and Planning for the Next Generation
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119 Verified Questions
119 Flashcards
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Sample Questions
Q1) If a job candidate files charges of employment discrimination against a company, the burden of proof in the case falls on ________.
A)the employer to prove that all pre-employment questions are job-related and nondiscriminatory
B)the candidate to prove that some pre-employment questions and actions were discriminatory
C)the Equal Employment Opportunity Commission representing the job candidate in the lawsuit
D)None of the above
Q2) Effective leaders know they must punish workers who take risks and fail so that other workers do not make the same mistakes.
A)True
B)False
Q3) The Equal Employment Opportunity Commission (EEOC)supplies employers with a list of questions it considers illegal in interviews.
A)True
B)False
Q4) What is leadership? How does leadership differ from management?
Page 19
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