Entrepreneurship and Innovation Test
Questions
Course Introduction
Entrepreneurship and Innovation explores the principles, processes, and skills involved in identifying, developing, and launching new business ventures. The course examines how creative ideas are generated, how market opportunities are identified, and how innovation can be leveraged to gain competitive advantage. Students will learn about business model development, funding sources, risk management, and the dynamics of startups and established organizations embracing an entrepreneurial mindset. Through case studies, group projects, and interaction with entrepreneurs, participants will gain practical tools and insights for turning innovative concepts into viable business solutions.
Recommended Textbook
Entrepreneurship Successfully Launching New Ventures 3rd Edition by Bruce R. Barringer
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15 Chapters
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Chapter 1: Introduction to Entrepreneurship
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Sample Questions
Q1) According to the textbook, entrepreneurs are ________ risk takers.
A) forceful
B) moderate
C) high
D) low
E) aggressive
Answer: B
Q2) According to Chapter 1, investors often cite the ________ as their most important criterion in the decision to fund new ventures.
A) financial position of the new venture
B) strength of the industry the new firm is entering
C) strength of the new venture's marketing plan
D) strength of the business idea
E) strength of the entrepreneur
Answer: E
Q3) Innovation is the process of creating something new, which is central to the entrepreneurial process.
A)True
B)False
Answer: True
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Chapter 2: Recognizing Opportunities and Generating Ideas
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Sample Questions
Q1) The Savvy Entrepreneurial Firm feature in Chapter 2 focuses on iHearSafe, ZUCA, and J.J. Creations, three entrepreneurial startups. While each firm is different and is successful in its own right, the main point of the feature is to illustrate that:
A) companies are often started by everyday people solving problems in their everyday lives
B) closely monitoring environmental trends is an effective way to identify business opportunities
C) one of the most important points to consider before launching a business is to determine if its window of opportunity is open
D) finding gaps in the marketplace is an effective way of identifying business opportunities
E) both economic and social forces impact the opportunities available to entrepreneurs
Answer: A
Q2) An opportunity is a thought, impression, or notion.
A)True
B)False
Answer: False
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Chapter 3: Feasibility Analysis
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Sample Questions
Q1) Think Gum, the company profiled in the opening feature for Chapter 3, produces gum. The idea behind Think Gum is to produce a gum that includes ingredients that improve concentration and memory. Think Gum initial target market was:
A) electronic game enthusiasts
B) extreme sports enthusiasts
C) college students
D) athletics
E) business professionals
Answer: C
Q2) The two components of product/service feasibility analysis are product/service desirability and:
A) product/service value
B) product/service durability
C) market timeliness
D) product/service affordability
E) product/service demand
Answer: E
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Chapter 4: Writing a Business Plan
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Sample Questions
Q1) Which of the following is the main purpose for writing a business plan?
A) The plan helps the company develop a "road map" to follow.
B) The plan introduces potential investors and other stakeholders to the business opportunity.
C) Both A and B are equally important.
D) Neither A nor B captures the true purpose of a business plan.
E) Reason A is the most important for experienced entrepreneurs and reason B is the most important for inexperienced entrepreneur.
Q2) A competitor analysis, which is a detailed analysis of a firm's competitors, should be included in the market analysis section of its business plan.
A)True
B)False
Q3) A competitor analysis should be included in the ________ section of a business plan.
A) market analysis
B) industry analysis
C) company description
D) management team and company structure
E) operations plan
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Page 6
Chapter 5: Industry and Competitor Analysis
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Sample Questions
Q1) A fragmented industry is one that is characterized by a small number of firms or approximately equal size.
A)True
B)False
Q2) The primary opportunity existing for startups in fragmented industries is to:
A) pursue a niche strategy, which focuses on a narrow segment of the industry that might be encouraged to grow through product or process innovation
B) win customers by placing an emphasis on service and process innovation
C) capture a first-mover advantage
D) pursue a cost reduction strategy, which is accomplished through achieving lower costs than industry incumbents through process innovation
E) consolidate the industry and establish industry leadership as a result of doing so
Q3) The five competitive forces model is a framework for understanding the structure of an industry.
A)True
B)False
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Chapter 6: Developing an Effective Business Model
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Sample Questions
Q1) ________ is the process of adapting a firm's core competencies to exploit new opportunities.
A) Resource leverage
B) Capacity proficiency
C) Ability leverage
D) Aptitude embellishment
E) Capacity extension
Q2) A ________ is a group of organizations with similar needs that band together to create a new entity to address those needs.
A) joint venture
B) network
C) consortia
D) strategic alliance
E) trade association
Q3) ________ describes the way a firm's product or service "goes to market."
A) Fulfillment and support
B) Execution and discharge
C) Achievement and discharge
D) Implementation and maintenance
E) Execution and maintenance
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Chapter 7: Preparing the Proper Ethical and Legal
Foundation
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Sample Questions
Q1) The Savvy Entrepreneurial Firm feature in Chapter 7 focuses on Globat.com, a Web hosting company, which encountered a crisis described in the feature. The main point of the feature was to illustrate that the manner in which a company handles a crisis:
A) has a bearing on its ability to develop high quality business partnerships B) provides an important standard for how it handles crises in the future
C) limits its legal liability
D) limits or contains the damage to its brand E) sends a message to its customers regarding its values and trustworthiness
Q2) Choosing a legal entity for a firm is a one-time event. Once a form of legal entity has been chosen, it cannot be changed.
A)True
B)False
Q3) A ________ is a formal statement of an organization's values on certain ethical and social issues.
A) code of conduct
B) code of behavior
C) code of performance
D) code of principles
E) code of morals
Page 9
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Chapter 8: Assessing a New Venture's Financial Strength and Viability
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Sample Questions
Q1) The statement of cash flows is divided into three separate activities:
A) profitability activities, stability activities, and investing activities
B) stability activities, earning activities, and financing activities
C) operating activities, capital activities, and liquidity activities
D) spending activities, earning activities, and capital activities
E) operating activities, investing activities, and financing activities
Q2) A firm's ________ is its current assets divided by its current debt.
A) working share
B) present share
C) working capital
D) owners' equity
E) current ratio
Q3) A financial statement is a(n):
A) set of ratios which depict relationships between a firm's financial items
B) estimate of a firm's future income and expenses
C) hybrid statement of cash flows
D) itemized forecast of a company's income, expenses, and capital needs
E) written report that quantitatively describes a firm's financial health
Q4) What is ratio analysis? Why is it important?
Q5) Describe the difference between historical and pro form financial statements.
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Chapter 9: Building a New Venture Team
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Sample Questions
Q1) A new venture team is the group of founders, key employees, and advisers that move a new venture from an idea to a fully functioning firm.
A)True
B)False
Q2) A board of directors has three formal responsibilities: appoint the officers of the firm, declare dividends, and:
A) write the firm's strategic plan
B) conduct the annual meeting
C) provide funding for the firm
D) represent the firm in public relations activities
E) oversee the affairs of the corporation
Q3) Relevant industry experience is a poor predictor of future entrepreneurial performance.
A)True
B)False
Q4) Most boards of advisers have between 5 and 15 members.
A)True
B)False
Q5) What is SCORE? What is its role in helping a firm fill out its new venture team?
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Chapter 10: Getting Financing or Funding
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Sample Questions
Q1) Why do most firms need funding? Provide a brief explanation of each reason.
Q2) An ________ is an institution, such as Credit Suisse First Boston, that acts an underwriter or agent for a firm engaged in an initial public offering.
A) venture bank
B) statutory bank
C) fiduciary bank
D) investment bank
E) public bank
Q3) Which of the following statement is incorrect about grant programs?
A) Granting agencies are very visible and well-known, so it's normally not hard to find one.
B) The federal government has grant programs beyond the SBIR and STTR programs.
C) Its important to avoid grant related scams.
D) There are a limited number of organizations that offer new businesses grants.
E) There are private foundations that grant money to both existing and startup firms.
Q4) What is meant by the term "bootstrapping"? Provide several examples of the ways that entrepreneurs bootstrap to raise money or cut costs?
Q5) What is an elevator speech? How did it get its name?
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Chapter 11: Unique Marketing Issues
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Sample Questions
Q1) Yelp's phrase "Real People. Real Reviews" is an example of a:
A) tagline
B) grabline
C) notice-line
D) catchline
E) grabline.
Q2) A firm's target market is the limited group of individuals or businesses that it goes after or tries to appeal to.
A)True
B)False
Q3) A firm's marketing mix is the assortment of products and services that it sells.
A)True
B)False
Q4) A firm's marketing mix consists of the following four elements:
A) product, price, promotion, and place
B) passion, pride, promotion, and place
C) passion, pleasure, product, and price
D) enthusiasm, passion, product, and price
E) place, promotion, passion, and product
Q5) What is a brand? How does a new firm develop a brand?
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Chapter 12: The Importance of Intellectual Property
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Sample Questions
Q1) The ________, which was drafted in 1979 by a special commission, attempted to set nationwide standards for trade secret legislation.
A) Intangible Assets Protection Act
B) Fairness in Intellectual Property Act
C) Uniform Trade Secrets Act
D) Trademark & Copyright Act
E) Economic Espionage Act
Q2) Since the first patent was granted, there have been over ________ patents granted in the United States.
A) 500,000
B) 3 million
C) 5 million
D) 7 million
E) 9 million
Q3) Trade secret disputes arise most frequently when one firm alleges that a trade secret claimed by another firm is common knowledge, and can therefore be used by anyone.
A)True
B)False
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Page 14
Chapter 13: Preparing for and Evaluating the Challenges of Growth
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Sample Questions
Q1) All businesses have the potential to be aggressive growth firms.
A)True
B)False
Q2) Emily Wills owns a commercial printing company. Emily has more business than she wants, in fact, she is presently turning away exciting new business opportunities because it is expensive to hire new employees, and she knows that if she did hire new employees it would take time for the new employees to be trained and to be socialized into the culture of her firm. Emily's inability to take advantage of the new business opportunities that are coming her way is due largely to the:
A) business aptitude problem
B) entrepreneurial aptitude problem
C) commercial opportunity problem
D) business capacity problem
E) managerial capacity problem
Q3) Define the term "market leadership." Why do firm work hard to obtain market leadership?
Q4) Fixed costs are the costs a company incurs as it generates sales.
A)True
B)False
Page 15
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Chapter 14: Strategies for Firm Growth
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Sample Questions
Q1) Which of the following was identified in the textbook as an advantage of participating in strategic alliances and joint ventures?
A) risk and cost sharing
B) loss of organizational flexibility
C) partner's cultures may clash
D) risk becoming dependent on a partner
E) loss of proprietary information
Q2) Pam Ryan owns a store that sells running shoes and related products. Pam is currently trying to increase sales through endorsements by famous runners and former Olympic athletics. Pam is pursuing a:
A) strategic alliance strategy
B) licensing strategy
C) market penetration strategy
D) geographic expansion strategy
E) improving an existing product or service strategy
Q3) The majority of entrepreneurial firms first enter foreign markets as exporters.
A)True
B)False
Q4) Describe what a joint venture is. Identify the two types of joint ventures.
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Chapter 15: Franchising
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Sample Questions
Q1) According to the textbook, one of the first companies in the United States to utilize franchising was:
A) McDonald's
B) Singer Sewing Machine
C) H&R Block
D) Coca-Cola
E) Curves International
Q2) According to a concept called ________ theory, it is more effective for the units of a growing chain to be run by franchises than by managers, because managers are usually paid a salary, and may not be as committed to the success of their individual units as franchisees, who are in effect the owners of the units they manage.
A) agency
B) stimulus
C) control
D) leadership
E) motivation
Q3) List and explain three of the common misconceptions about franchising.
Q4) What are the primary advantages and disadvantages to establishing a franchise system (from the franchisor's point of view)?
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