Test Bank For Entrepreneurial Small Business, 7th Edition By Jerome Katz, Richard Green Chapter 1-18
Answers are at the End of Each Chapter Chapter 1 Student name:__________ TRUE/FALSE - Write 'T' if the statement is true and 'F' if the statement is false. 1) The majority of new firms go through similar start-up processes with those most likely to be successful following a four-step process: finance, check, plan, and do. ⊚ true ⊚ false 2) Kevin wanted to start his own business of ferrying pets to the vet or groomers for their
owners but he was advised to perform a feasibility analysis before moving forward. Kevin is on the third step of the entrepreneurial process: plan. ⊚ true ⊚ false 3) In order to make profits from a small business, the company needs to make an actual product. ⊚ true ⊚ false 4) Truly entrepreneurial businesses are characterized by imitativeness in their products,
services, or business models. ⊚ true ⊚ false 5) Self-employed persons are not referred to as entrepreneurs. ⊚ true ⊚ false 6) Crowdsourcing is funding a business online through the collective involvement of others who
provide donations, loans, or investments. ⊚ true ⊚ false
7) High-performing small businesses start with the intent of eventually going public, following
the pattern of growth and operations of a big business. ⊚ true ⊚ false 8) Lifestyle or part-time firms typically provide enough profit or salary to supplement an
income but usually not enough on which to live. ⊚ true ⊚ false 9) If you don't succeed the first time, try, try again. This is called the strategy of self-efficacy. ⊚ true ⊚ false 10) High-growth ventures are also known as main street businesses. ⊚ true ⊚ false 11) Small businesses employ about 10 percent of all Americans. ⊚ true ⊚ false 12) Big business often has trouble with innovations, but small, new, businesses are more likely to
see new revenues in innovations. ⊚ true ⊚ false 13) Using low-cost or free techniques to minimize cost of doing business is referred to as
bootstrapping. ⊚ true ⊚ false 14) Ninety percent of all new businesses fail within two years. ⊚ true ⊚ false 15) The most frequently occurring element of the BRIE model is intention. ⊚ true ⊚ false
16) In the BRIE model, exchange refers to moving resources, goods, or services to others, in
exchange for money or other resources. ⊚ true ⊚ false 17) The disadvantage of the BRIE model is that it does not mention the management of
resources. ⊚ true ⊚ false 18) One of the seven key strategies of the entrepreneurial way involves effectuation or an
approach used to create alternatives in uncertain environments. ⊚ true ⊚ false 19) High-growth ventures and big businesses generally do not succeed without small businesses
offering supporting services. ⊚ true ⊚ false 20) Small businesses are important to the U.S. economy but do very little for local communities. ⊚ true ⊚ false 21) Taking products and services made in your home country and selling them in other countries
is called importing. ⊚ true ⊚ false MULTIPLE CHOICE - Choose the one alternative that best completes the statement or answers the question. 22) The__________ is a U.S. government agency that helps people start a business and also provides them support and advocacy. A) Small Business Administration B) U.S. Department of Business Development C) U.S. Department of Commerce D) U.S. Entrepreneurial Administration
23) Truly entrepreneurial businesses are characterized by A) the franchise they are associated with. B) the degree to which their products are imitative. C) the novelty in their products, services, or business models. D) the ease with which their product is accepted by the buyers. 24) Small businesses are usually A) imitative in nature. B) characterized by the novelty of their products. C) the same as high-growth ventures. D) not affected by market fluctuations. 25) Which of the following statements is true of a franchise? A) Franchise is the international term for all small businesses. B) A franchise is a type of novelty organization. C) A franchise is an organization that provides loans to start small businesses. D) A franchise is a prepackaged business bought, rented, or leased from a company. 26) A person who becomes an owner by inheriting or getting a stake in a family business is
known as A) a founder. B) a franchisor. C) an heir. D) a serial entrepreneur. 27) A business owned by an individual or a small group is referred to as a(n) A) corporate chain. B) conglomerate. C) concern. D) independent small business. 28) A business run by the individual who owns it is referred to as a(n) A) franchise. B) owner-managed firm. C) social venture. D) unicorn.
29) Which of the following statements is true of a small business? A) The preferred funding source for a small business is other people’s money. B) When facing bankruptcy, a small business is likely to sell more rather than cut costs. C) Small businesses consider sales as more important than marketing. D) For a small business, the focus is more on effectiveness than on efficiency. 30) Small businesses differ from high-growth ventures in that in small businesses A) the focus is on effectiveness rather than efficiency. B) the preferred source of funding is the owner’s own money rather than other people’s
money. C) the delegation of responsibilities is easy and necessary rather than difficult. D) the meta-strategy is for novelty rather than imitation. 31) High-growth ventures differ from small businesses in that in high-growth ventures A) the focus is on efficiency rather than effectiveness. B) the meta-strategy is imitation rather than novelty. C) the human resource system is personalized rather than professionalized. D) the limitation of growth is dictated by market response rather than the owner’s loss of
control. 32) According to the text, the definition of a__________ is one that involves 1–50 people and
has its owner managing the business on a day-to-day basis. A) franchise B) small business C) unicorn D) high-growth venture 33) Which of the following statements is true of a high-growth venture? A) A high-growth venture considers sales as more important than marketing. B) The meta-strategy for a high-growth venture is novelty. C) A high-growth venture focuses more on efficiency than on effectiveness. D) The loss of control is what limits growth in a high-growth venture. 34) When a person believes they can achieve a goal, they are exhibiting A) effectuation. B) perseverance. C) overall growth strategy. D) self-efficacy.