Introduction to Entrepreneurship Exam Bank
Course Introduction
Introduction to Entrepreneurship explores the fundamental principles and practices of starting and managing a new business venture. The course covers essential topics such as opportunity identification, business model generation, market analysis, resource planning, and financing options. Students will examine case studies of successful entrepreneurs, learn strategies for innovation and creativity, and develop practical skills through hands-on projects such as creating a business plan. By the end of the course, students will gain an understanding of the challenges and rewards associated with entrepreneurship and acquire the knowledge necessary to launch or contribute to a new enterprise.
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) Which of the following statement is correct?
A) Entrepreneurs love the spotlight.
B) The major attributes that lenders and venture capitalists look for in entrepreneurs favor younger rather than older entrepreneurs.
C) Entrepreneurs are born not made.
D) Entrepreneurs tend to be high risk takers.
E) Studies show that people with parents who were self-employed are more likely to become entrepreneurs.
Answer: E
Q2) In his/her book The Theory of Economic Development, ________ argued that entrepreneurs develop new products and technologies that over time make current products and technologies obsolete. This process is called creative destruction.
A) Michael Porter
B) H.H. Stevenson
C) Joseph Schumpeter
D) Michael Gerber
E) Edith Penrose
Answer: C
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Chapter 2: Recognizing Opportunities and Generating Ideas
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Q1) Marie is a very creative person. Often, when trying to generate a novel or useful idea, she spends several days "mulling over" the idea, which is her way of thinking it through, at both the conscious and unconscious level. The stage of the creative process that Marie is in while she is mulling over an idea is referred to as:
A) preparation
B) insight
C) evaluation
D) elaboration
E) incubation
Answer: E
Q2) A(n) ________ is a thought, impression, or notion. A(n) ________ is a favorable set of circumstances that creates the need for a new product, service, or business.
A) scheme, notion
B) opportunity, idea
C) idea, design
D) idea, opportunity
E) notion, scheme
Answer: D
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Chapter 3: Feasibility Analysis
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Sample Questions
Q1) Describe what a concept statement is, and what it should include.
Answer: A concept statement is a preliminary description of a business.It should include:
-A description of the product or service being offered.
-The intended target market.
-The benefits of the product or service.
-A description of how the product will be positioned relative to similar ones in the market.
-A description of how the product or service will be sold and distributed. The concept statement is administered as part of product/market feasibility analysis and should be used to get initial feedback and input regarding a business idea.
Q2) According to the textbook, which is the proper sequence of events in developing successful business ideas?
A) opportunity recognition, feasibility analysis, development of a business plan
B) feasibility analysis, opportunity recognition, development of a business plan
C) development of a business plan, opportunity recognition, feasibility analysis
D) feasibility analysis, development of a business plan, opportunity recognition
E) development of a business plan, feasibility analysis, opportunity recognition
Answer: A
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Chapter 4: Writing a Business Plan
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Q1) What is an "executive summary?" Why is the executive summary often called the most important part of a business plan?
Q2) Why is the "management team and company structure" section of the business plan often given disproportionate weight among investors?
Q3) Even though the executive summary appears at the beginning of the business plan, it should be written last.
A)True
B)False
Q4) 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
Q5) Experienced entrepreneurs often refer to business plans as "living, breathing documents." What is meant by this characterization of business plans?
Q6) What are the two main reasons for writing a business plan.
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Chapter 5: Industry and Competitor Analysis
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Q1) There are four factors that determine the threat of new entrants: number and balance of competitors, degree of difference between products, growth rate of an industry, and level of fixed costs.
A)True
B)False
Q2) The three types of competitors a business will face are direct competitors, indirect competitors, and future competitors.
A)True
B)False
Q3) A fragmented industry is one that is characterized by a small number of firms or approximately equal size.
A)True
B)False
Q4) The two trends that are most important to focus on in an industry analysis are business trends and environmental trends.
A)True
B)False
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Chapter 6: Developing an Effective Business Model
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Q1) In a business model context, the three components of a firm's customer interface are target customer, fulfillment and support, and:
A) pricing structure
B) product/market scope
C) basic for differentiation
D) strategic assets
E) business mission
Q2) Which of the following are the primary elements of a startup's core strategy?
A) target customer, fulfillment and support, pricing structure
B) suppliers, partners, other key relationships
C) pricing structure, suppliers, strategic assets
D) core competencies, strategic assets, funding model
E) mission statement, product/market scope, basis for differentiation
Q3) Companies ultimately try to combine their core competencies and strategic assets to create a sustainable competitive advantage.
A)True
B)False
Q4) Describe the two potential fatal flaws of business models.
Q5) Why is it important for a firm to have a well-thought-out business model?
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Chapter 7: Preparing the Proper Ethical and Legal Foundation
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Sample Questions
Q1) The What Went Wrong? feature in Chapter 7 focuses on Green Planet Juicery, a smoothie drink restaurant that went out of business. According to the feature, the primary reasons that Green Planet Juicery went out of business were:
A) accounting and financial mistakes
B) management and legal snafus
C) marketing mistakes and financing snafus
D) legal snafus and poor feasibility analysis
E) failure to incorporate and financing mistakes
Q2) The most compelling advantage of stock options is the potential rewards to participants when:
A) the stock splits
B) the stock price increases
C) the stock price more than triples
D) the stock is placed in a trust fund
E) the stock price decreases
Q3) A noncompete agreement prevents an individual from competing against a former employer for a specific period of time.
A)True
B)False
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Chapter 8: Assessing a New Venture's Financial Strength and Viability
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Q1) Describe the difference between historical and pro form financial statements.
Q2) 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
Q3) What is ratio analysis? Why is it important?
Q4) The balance sheet reflects the results of the operations of a firm over a specified period of time.
A)True
B)False
Q5) On a firm's income statement, net sales consists of:
A) operating expenses minus cost of sales
B) total sales minus allowances for returned goods and discounts
C) cost of sales minus allowances for returned goods and discounts
D) cost of sales minus operating expenses
E) total sales minus operating expenses
Page 10
Q6) Describe the purpose of the income statement, the balance sheet, and the statement of cash flows.
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Chapter 9: Building a New Venture Team
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Sample Questions
Q1) Which of the following statements is not true regarding the attributes of the founder or founders of a firm?
A) Evidence suggests that important entrepreneurial skills are enhanced through higher education.
B) Founders with prior entrepreneurial experience are more likely to avoid costly mistakes.
C) Founders with experience in the same industry as their new ventures will typically have "blinders" on and are typically not as effective as founders new to the industry.
D) Founders with broad social and professional networks have an advantage.
E) New ventures that are started by a team rather than an individual have an advantage.
Q2) An advisory board is a panel of experts who are asked by a firm's managers to provide counsel and advice on an ongoing basis.
A)True
B)False
Q3) Most boards of advisers have between 5 and 15 members.
A)True
B)False
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Chapter 10: Getting Financing or Funding
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Q1) For startup firms, the cost of buying real estate, building facilities, and purchasing equipment often exceeds the firm's ability to provide funds for those needs on its own. Which of the following reasons that motivate firms to seek funding or financing is illustrated in this example?
A) lengthy product development cycles
B) costs associated with building a brand
C) cash flow challenges
D) capital investments
E) personnel costs
Q2) The idea candidate for a bank loan is a firm with a strong cash flow, low leverage, audited financial statements, good management, and a healthy balance sheet.
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
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Chapter 11: Unique Marketing Issues
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Q1) ________ marketing is a low-budget approach to marketing that relies on ingenuity, cleverness, and surprise rather than traditional techniques.
A) Rebel
B) Bug
C) Catching
D) Guerrilla
E) Revolutionary
Q2) According to the textbook, a brand is all of the following except:
A) reputation
B) collection of memories
C) a pledge
D) a promise
E) a written warrantee
Q3) The amount of money consumers pay to buy a product is its:
A) price
B) fee
C) value
D) cost
E) charge
Q4) 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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Q1) Copyright law is governed by the:
A) U.S. Constitution
B) The 1946 Intellectual Property Act
C) The 1966 Trademark and Copyright Act
D) The 1955 Inventors and Writer's Protection Act
E) Copyright Revision Act of 1976
Q2) Patents, trademarks, copyrights, and licenses are the four key forms of intellectual property.
A)True
B)False
Q3) ________ patents are the second most common type of patent and cover the invention of new, original, and ornamental designs for manufactured products.
A) Aesthetic
B) Utility
C) Visual
D) Blueprint
E) Design
Q4) Identify and briefly describe the three types of patents.
Q5) What is a trademark? Why are trademarks important?
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Chapter 13: Preparing for and Evaluating the Challenges of Growth
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Q1) Jeremy Rhodes leases a manufacturing facility that produces computer keyboards. Jeremy tries to keep production high, because his lease payments are $6,200 a month, regardless of whether he produced one computer keyboard a month or 10,000. Jeremy's lease payment is a:
A) variable cost
B) secondary cost
C) fixed cost
D) marginal cost
E) tangible cost
Q2) According to the textbook, the businesses that have the potential to grow the fastest over a sustained period of time are ones that:
A) solve a significant problem or have a major impact on their customers' productivity or lives
B) are cost leaders and are promote themselves aggressively
C) have a major impact on their customers' lives and sell high quality products
D) take advantage of environmental trends and are cost leaders
E) solve a significant problem or sell high quality products
Q3) What is the organizational life cycle and why is it important?
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Chapter 14: Strategies for Firm Growth
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Q1) New product development, other product related strategies, and international expansion are examples of:
A) external growth strategies
B) domestic growth strategies
C) secondary growth strategies
D) internal growth strategies
E) inward growth strategies
Q2) Which of the following is the primary disadvantage of licensing as a foreign market entry strategy?
A) high transportation costs
B) quality control
C) It is usually a one-time activity.
D) A firm loses partial control of its business operations.
E) A firm in effect "teaches" a foreign company how to produce its proprietary products.
Q3) Licensing is the granting of permission by one company to another company to use a specific form of its intellectual property under clearly defined conditions.
A)True
B)False
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Chapter 15: Franchising
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Q1) What is the difference between a product and trademark franchise and a business format franchise? Which type of franchise is most common for entrepreneurial firms?
Q2) How can a person tell if franchising is right for them?
Q3) Clark Jensen recently opened a Planet Smoothie franchise. So far, he is very satisfied with Planet Smoothie because in exchange for an initial franchise fee and an ongoing royalty payment, Planet Smoothie has provided Clark a formula for doing business along with training, advertising, and other forms of assistance. Clark purchased a ________ franchise.
A) business extension
B) formula driven
C) sales extension
D) business format
E) product and trademark
Q4) Which of the following companies would not be suitable for franchising?
A) College Nannies & Tutors
B) Smoothie King
C) McDonald's
D) H&R Block
E) Lowe's
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