Innovation and Entrepreneurship Exam Practice Tests
Course Introduction
This course explores the fundamental principles of innovation and entrepreneurship, equipping students with the knowledge and skills to identify opportunities, develop innovative solutions, and launch new ventures. Through real-world case studies, interactive workshops, and team projects, students will learn about creativity, the entrepreneurial mindset, business model development, and the process of turning ideas into viable enterprises. The course also addresses challenges faced by entrepreneurs, including securing funding, managing growth, and fostering an innovative culture, while encouraging students to think critically and act proactively in dynamic business environments.
Recommended Textbook
Entrepreneurship Successfully Launching New Ventures 3rd Edition by Bruce R. Barringer
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15 Chapters
1125 Verified Questions
1125 Flashcards
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Chapter 1: Introduction to Entrepreneurship
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75 Flashcards
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Sample Questions
Q1) Atlantic Printing LLC is a startup that is working on a new technology for the printing industry. Because the technology its working on is highly proprietary, the company is located in the warehouse district of a large eastern city. Atlantic's founder, Sarah Sims, rarely gives interviews, and is careful to not divulge much about what the company is doing. Which of the following common myths about entrepreneurs does the behavior of its founder, Sarah Sims, dispel?
A) Entrepreneurs are born, not made.
B) Entrepreneurs are gamblers.
C) Entrepreneurs are motivated primarily by money.
D) Entrepreneurs should be young and energetic.
E) Entrepreneurs love the spotlight.
Answer: E
Q2) 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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Page 3
Chapter 2: Recognizing Opportunities and Generating Ideas
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75 Flashcards
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Sample Questions
Q1) Which of the following is correct regarding opportunities and ideas?
A) An opportunity and an idea are essentially the same thing.
B) An idea almost always meets the criteria of an opportunity.
C) An opportunity is a thought, an impression, or a notion.
D) An idea is a favorable set of circumstances that creates a need for a new product, service, or business.
E) It's important to discern whether a particular idea meets the tests of an opportunity.
Answer: E
Q2) An opportunity is a favorable set of circumstances that creates a need for a new product, service, or business.
A)True
B)False
Answer: True
Q3) The three ways to identify an opportunity include observing trends, solving a problem, and finding gaps in the marketplace.
A)True
B)False
Answer: True
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Chapter 3: Feasibility Analysis
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Sample Questions
Q1) Which of the following statements about target markets is incorrect?
A) There is a distinct difference between a firm's industry and its target market.
B) The challenge in identifying an attractive target market is to find a market that's large enough for the proposed business but is yet small enough to avoid attracting larger competitors.
C) By focusing on a target market, a firm can usually avoid head-to-head competition with industry leaders and can focus on serving a specialized market very well.
D) A target market is a place within a larger market segment that represents a narrower group of customers with similar needs.
E) Its generally easier to find good information about a target market than an industry as a whole.
Answer: E
Q2) There are two components to product/service feasibility analysis: product/service desirability and total startup funds needed.
A)True
B)False
Answer: False
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Chapter 4: Writing a Business Plan
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Sample Questions
Q1) According to the textbook, the ________ are the heart of the financial section of a business plan.
A) financial ratios
B) pro forma financial statements
C) budgets
D) sources and uses of funds statements
E) break-even analyses
Q2) Experienced entrepreneurs often refer to business plans as "living, breathing documents." What is meant by this characterization of business plans?
Q3) What are the two main reasons for writing a business plan.
Q4) According to the textbook, only ________ of the 600 entrepreneurs that participated in a recent Wells Fargo/Gallup Small Business Study indicated that they had started their venture with a business plan.
A) 6 percent
B) 31 percent
C) 22 percent
D) 14 percent
E) 48 percent
Q5) What is a business plan?
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Chapter 5: Industry and Competitor Analysis
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75 Flashcards
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Sample Questions
Q1) Each quarter, Tammy Anderson, who owns a chain of floral shops, does a detailed analysis of her firm's competitors. This analysis is called:
A) competitor analysis
B) challenger analysis
C) strategic analysis
D) participant analysis
E) industry analysis
Q2) BusinessesAtoZ, the company profiled in the opening feature for Chapter 5, has a unique position in its industry. It is positioned:
A) as a small Web hosting company that offers a high degree of customer service
B) as a large Web hosting company that focuses primarily on keeping its customers up and running
C) right in the middle offering the customer service advantages of a small Web hosting company and the security advantages of a large Web hosting company
D) as an outsource provider to both small and large Web hosting companies
E) as a consulting company working with both small and large Web hosting companies
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Chapter 6: Developing an Effective Business Model
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Sample Questions
Q1) Organizations (typically nonprofit) that are formed by firms in the same industry to collect and disseminate trade information, offer legal and technical advice, furnish industry-related training, and provide a platform for collective lobbying.
A) strategic alliance
B) trade association
C) network
D) joint venture
E) consortia
Q2) What is meant by the statement, "A firm's business model takes it beyond its own boundaries?" Provide an example to illustrate your answer.
Q3) The process of adapting a company's core competencies to exploit new opportunities is referred to as resource conversion.
A)True
B)False
Q4) Companies ultimately try to combine their core competencies and strategic assets to create a sustainable competitive advantage.
A)True
B)False
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Chapter 7: Preparing the Proper Ethical and Legal Foundation
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Sample Questions
Q1) A corporation is formed by filing ________ with the Secretary of State's office in the state of incorporation.
A) certificate of intent to incorporate
B) articles of business
C) corporate credentials
D) a corporation permit
E) articles of incorporation
Q2) An ethical dilemma is a situation that involves doing something that is beneficial to oneself or the organization, but may be unethical.
A)True
B)False
Q3) Most founders' agreements include a ________, which legally obligates the departing founder to sell to the remaining founders his or her interest in the firm if the remaining founders are interested.
A) redemption clause
B) buyback clause
C) statutory purchase clause
D) voluntary recoup clause
E) shareholder surrender clause
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 income statement records all the revenues and expenses for a given period and shows whether the firm is making a profile or is experiencing a loss.
A)True
B)False
Q2) Describe the purpose of the income statement, the balance sheet, and the statement of cash flows.
Q3) 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
Q4) Which of the following was not identified as one of the four main financial objectives of a firm?
A) stability
B) efficiency
C) timeliness
D) liquidity
E) profitability
Chapter 9: Building a New Venture Team
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Sample Questions
Q1) According to the textbook, most boards of advisers have between:
A) 5 and 15 members
B) 2 and 4 members
C) 10 and 18 members
D) 2 and 3 members
E) 4 and 7 members
Q2) A ________ is the group of founders, key employees, and advisers that move a new venture from an idea to a fully functioning firm.
A) new venture panel
B) startup team
C) new venture team
D) new project team
E) startup cadre
Q3) Are more firms started by individuals or founding teams? What are the advantages to founding a firm as a team rather than as an individual?
Q4) Homogeneous teams are diverse in terms of their abilities and experiences.
A)True
B)False
Q5) What is a skills profile and what is it used for?
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Chapter 10: Getting Financing or Funding
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Sample Questions
Q1) Very few founders contribute personal funds to their ventures.
A)True
B)False
Q2) Historically, the vast majority of SBIR Phase 1 proposals are approved.
A)True
B)False
Q3) There are two common types of loans:
A) single-purpose loans and multiple-purpose loans
B) single-purpose loans and lines of credit
C) multiple-purpose loans and venture capital
D) private placements and lines of credit
E) one-time-purpose loans and venture capital
Q4) The SBIR and STTR programs are two important sources of early stage funds for technology firms.
A)True
B)False
Q5) What is a business angel? Describe the prototypical business angel. How much money do business angels typically invest in a single company?
Q6) Why do most firms need funding? Provide a brief explanation of each reason.
Q7) What is an elevator speech? How did it get its name?
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Chapter 11: Unique Marketing Issues
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75 Flashcards
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Sample Questions
Q1) According to the textbook, a successful brand can increase the market value of a company by:
A) 5 to 10 percent
B) 20 to 30 percent
C) 40 to 50 percent
D) 50 to 75 percent
E) 75 to 100 percent
Q2) Some companies monitor the integrity of their brands through a program of:
A) brand administration
B) brand persistence
C) brand determination
D) brand resolution
E) brand management
Q3) According to the textbook, most experts recommend ________ pricing because it hinges on the perceived value of a product or service.
A) value-based
B) cost-based
C) competitive-based
D) tactical
E) strategic
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Chapter 12: The Importance of Intellectual Property
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Sample Questions
Q1) Copyright infringement occurs when one work derives from another or is an exact copy.
A)True
B)False
Q2) Trademark law falls under the Lanham Act, which passed in 1946.
A)True
B)False
Q3) Which of the following is not one of the four key forms of intellectual property protection?
A) trade secrets
B) copyrights
C) trademarks
D) innovations
E) patents
Q4) A trademark is renewable:
A) every 10 years, as long as the mark remains in use
B) indefinitely, regardless of whether the mark remains in use
C) every 20 years from the date of application for the trademark
D) every 3 years
E) every 33 years
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Chapter 13: Preparing for and Evaluating the Challenges of Growth
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Sample Questions
Q1) ________ means that as the number of employees a firm need increases, it becomes increasingly difficult for it to find the right employees, place them in appropriate positions, and provide adequate supervision.
A) Difficult hazard
B) Adverse hazard
C) Adverse selection
D) Moral selection
E) Moral hazard
Q2) According to the textbook, most entrepreneurial firms:
A) are ambivalent about growth
B) want to grow
C) do not want to grow
D) want to grow if the economy is strong but do not want to grow if the economy is weak
E) want to grow if they are a service firm but do not want to grow if they are a manufacturing firm
Q3) According to Chapter 13, business success doesn't always scale. What is meant by this statement?
Q4) What is the organizational life cycle and why is it important?
Page 15
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Chapter 14: Strategies for Firm Growth
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Sample Questions
Q1) A ________ is an entity created when two or more firms pool a portion of their resources to create a separate, jointly owned organization.
A) strategic venture
B) strategic alliance
C) tactical venture
D) acquisition venture
E) joint venture
Q2) The granting of permission by one company to another company to use a specific form of its intellectual property under clearly defined conditions is referred to as:
A) verifying
B) confirming
C) endorsing
D) licensing
E) certifying
Q3) Geographic expansion is most common in retail settings.
A)True
B)False
Q4) Explain the difference between internal and external growth strategies? Provide examples of each.
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Chapter 15: Franchising
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Sample Questions
Q1) The Partnering for Success feature in Chapter 15 focuses on how franchise organizations can boost their sales while at the same time reduce their expenses. The technique that the feature recommends to achieve these dual objectives is:
A) strategic alliances
B) joint ventures
C) outsourcing
D) licensing
E) cobranding
Q2) Which of the following is not a disadvantage of buying a franchise?
A) cost of the franchise
B) duration and nature of the commitment
C) restrictions on creativity
D) availability of financing
E) potential for failure
Q3) How can a person tell if franchising is right for them?
Q4) Business format franchises typically allow franchisees substantial flexibility in how they run their individual franchise units.
A)True
B)False
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