Entrepreneurship And Innovation Knowledge Test! Trivia Quiz

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Entrepreneurship And Innovation Knowledge Test! Trivia Quiz - Quiz

Planning to become an entrepreneur? If yes, you must try this entrepreneurship and innovation knowledge trivia quiz to test your knowledge. An entrepreneur is a person who comes up with an idea for a business but can predict the risks involved and if they are worth bringing the intended profits. One of an entrepreneur's skills is a knack for innovation. This trivia quiz will test how much you understand the interrelation between entrepreneurship and innovation. Give it a shot and see how much you can score.


Questions and Answers
  • 1. 

    There are two components of the reality test:

    • A.

      External component only

    • B.

      Internal component

    • C.

      Both a and b options 

    • D.

      None

    Correct Answer
    C. Both a and b options 
    Explanation
    The correct answer is "Both a and b options." This means that both the external component and the internal component are components of the reality test. The external component refers to the objective, observable aspects of reality that can be tested and verified by others. The internal component refers to an individual's subjective perception and interpretation of reality, which may include thoughts, beliefs, and emotions. Both of these components are important in assessing and understanding reality.

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  • 2. 

    Collateral includes any assets an entrepreneur pledges to a lender as a security for repayment of the loan. True or false? 

    • A.

      True

    • B.

      False

    Correct Answer
    A. True
    Explanation
    The statement is true. Collateral refers to any assets that an entrepreneur pledges to a lender as security for loan repayment. This means that if the entrepreneur fails to repay the loan, the lender has the right to seize and sell the collateral to recover the amount owed. Collateral provides a guarantee to the lender and reduces the risk associated with lending money, making it an important factor in loan agreements.

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  • 3. 

    An evaluation of character is frequently based on intangible factors such as honesty, competence, polish, determination, knowledge, experience, and ability. True or false? 

    • A.

      True

    • B.

      False

    Correct Answer
    A. True
    Explanation
    The statement is true because when evaluating someone's character, it is common to consider intangible factors such as honesty, competence, polish, determination, knowledge, experience, and ability. These qualities are not easily measurable or quantifiable but play a significant role in assessing an individual's character.

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  • 4. 

    Internet is a secondary research tool. True or false? 

    • A.

      True

    • B.

      False

    Correct Answer
    A. True
    Explanation
    The statement "Internet is a secondary research tool" is true. The internet is widely used as a secondary research tool because it provides access to a vast amount of information and resources. It allows users to search for and gather information from various online sources such as websites, databases, articles, and publications. However, it is important to note that the internet should not be the sole source of research, as primary research methods such as surveys, interviews, and experiments are also crucial for obtaining original data and insights.

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  • 5. 

    The first step in assessing industry attractiveness is to paint a picture. True or false? 

    • A.

      True

    • B.

      False

    Correct Answer
    A. True
    Explanation
    The first step in assessing industry attractiveness is indeed to paint a picture. This means that before analyzing the attractiveness of an industry, it is essential to gather information and create a comprehensive overview of the industry's current state, including its key players, market trends, competitive landscape, and potential opportunities and threats. This step helps in understanding the industry's dynamics and enables better decision-making regarding investment or strategic planning.

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  • 6. 

    The easiest part of launching a business is coming up with an idea for a new business. True or false? 

    • A.

      True

    • B.

      False

    Correct Answer
    A. True
    Explanation
    Coming up with an idea for a new business is often considered the easiest part of launching a business because it requires creativity and brainstorming. However, it is important to note that while generating an idea may be relatively simple, successfully executing and implementing that idea into a profitable business venture can be much more challenging. Therefore, while the process of generating ideas may be easy, the overall process of launching a business involves many other complex factors such as market research, planning, financing, and marketing strategies.

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  • 7. 

    Business success requires much more than just a great new idea. True or false? 

    • A.

      True

    • B.

      False

    Correct Answer
    A. True
    Explanation
    Business success requires much more than just a great new idea. While having a great new idea is important, it is not sufficient for achieving success in business. Other factors such as effective execution, market demand, competition, financial management, marketing strategies, and adaptability are equally crucial. Without these additional elements, even the best idea may fail to translate into a successful business venture. Therefore, it is true that business success requires more than just a great new idea.

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  • 8. 

    The best business ideas start with a group of customers with a common problem.

    • A.

      True

    • B.

      False

    Correct Answer
    A. True
    Explanation
    The statement is true because successful business ideas often arise from identifying and addressing a specific problem or need that a group of customers share. By understanding and catering to this common problem, businesses can develop products or services that provide value and meet the customers' needs. This approach increases the chances of success as it focuses on solving a problem that already exists and has a market demand.

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  • 9. 

    One of the following is not from the idea sketch pad.

    • A.

      Customers

    • B.

      Value proposition

    • C.

      People

    • D.

      Tested

    Correct Answer
    D. Tested
    Explanation
    The term "tested" does not fit with the other options in the context of an idea sketch pad. The idea sketch pad typically includes elements such as customers, value proposition, and people, which are all related to generating and developing ideas. However, "tested" is not a component of the initial idea generation process, but rather a subsequent step where ideas are evaluated and validated.

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  • 10. 

    The term 'benefit' refers to what the customer gains from the product or service feature.  (e.g. lower energy bills, faster access to the internet) 

    • A.

      True

    • B.

      False

    Correct Answer
    A. True
    Explanation
    The statement is true because the term "benefit" indeed refers to what the customer gains from a product or service feature. It is the advantage or positive outcome that the customer experiences as a result of using the product or service. Examples of benefits include lower energy bills or faster access to the internet.

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  • 11. 

    The entrepreneur must not determine how the value proposition will generate revenue.

    • A.

      True

    • B.

      False

    Correct Answer
    B. False
    Explanation
    This statement is false. As an entrepreneur, it is crucial to determine how the value proposition will generate revenue. This involves identifying the target market, understanding their needs and preferences, and developing a business model that effectively monetizes the value proposition. Revenue generation is a fundamental aspect of any business, and entrepreneurs play a vital role in strategizing and implementing ways to generate income from their value proposition.

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  • 12. 

    A feasibility analysis is a process of determining whether entrepreneurs' ideas are a viable foundation for creating a successful business.

    • A.

      True

    • B.

      False

    Correct Answer
    A. True
    Explanation
    A feasibility analysis is indeed a process that entrepreneurs undertake to assess the viability of their ideas as a foundation for a successful business. This analysis involves evaluating various factors such as market demand, competition, financial resources, and technical feasibility to determine if the idea has potential for success. It helps entrepreneurs make informed decisions and identify potential challenges or risks before investing time and resources into a business venture. Therefore, the given answer "True" accurately reflects the purpose and importance of a feasibility analysis in the entrepreneurial process.

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  • 13. 

    If the idea fails to pass muster the entrepreneur drops it and moves on to the next idea.

    • A.

      True

    • B.

      False

    Correct Answer
    A. True
    Explanation
    The statement implies that if an idea does not meet the required standards or expectations, the entrepreneur will abandon it and proceed to the next idea. This suggests that the entrepreneur is willing to let go of unsuccessful ideas and is open to exploring new possibilities. Therefore, the answer "True" accurately reflects the concept of the entrepreneur's decision-making process.

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  • 14. 

    The primary goals of a business plan are

    • A.

      To guide entrepreneurs as they launch their businesses

    • B.

      To help them acquiring the necessary financing to launch

    • C.

      All of the above

    • D.

      None of the above

    Correct Answer
    C. All of the above
    Explanation
    A business plan serves as a roadmap for entrepreneurs, providing guidance and direction as they launch their businesses. It outlines the strategies, goals, and objectives that need to be accomplished. Additionally, a well-developed business plan helps entrepreneurs in acquiring the necessary financing to launch their business. By presenting a comprehensive and well-structured plan, entrepreneurs can demonstrate the viability and potential profitability of their business, making it easier to secure funding from investors or financial institutions. Therefore, the correct answer is "all of the above" as a business plan serves both purposes.

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  • 15. 

    Lenders and investors must be satisfied with the entrepreneur's character.

    • A.

      True

    • B.

      False

    Correct Answer
    A. True
    Explanation
    Lenders and investors need to be confident in the character of an entrepreneur before providing financial support. This is because the character of the entrepreneur can impact their ability to manage and grow the business successfully. Lenders and investors want to ensure that the entrepreneur is trustworthy, reliable, and has a strong work ethic. They want to see that the entrepreneur is committed to the business and has the integrity to make responsible financial decisions. Ultimately, the character of the entrepreneur plays a crucial role in determining whether lenders and investors will feel comfortable investing in their business.

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  • 16. 

    The industry is more attractive to new entrants when quality substitutes are readily available.

    • A.

      True

    • B.

      False

    Correct Answer
    B. False
    Explanation
    When quality substitutes are readily available, the industry becomes less attractive to new entrants. This is because the presence of substitutes gives consumers more options and reduces their dependence on a particular industry. As a result, new entrants may face more competition and struggle to gain market share. Therefore, the statement that the industry is more attractive to new entrants when quality substitutes are readily available is false.

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  • 17. 

    A business plan serves two essential functions:

    • A.

      Guiding the company by charting its future course and defining its strategy for following it

    • B.

      Attracting lenders and investors who will provide needed capital

    • C.

      All of the above

    • D.

      None

    Correct Answer
    C. All of the above
    Explanation
    A business plan serves two essential functions. Firstly, it guides the company by outlining its future course and defining the strategy to follow. This helps the company stay focused and make informed decisions. Secondly, a well-developed business plan attracts lenders and investors who are crucial in providing the needed capital for the business. By presenting a clear and comprehensive plan, it increases the chances of securing financial support from these stakeholders. Therefore, the answer "all of the above" is correct as it encompasses both functions of a business plan.

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  • 18. 

    The Value Test proves that: A venture offers investors or lenders an attractive rate of return or a high probability of repayment.

    • A.

      True

    • B.

      False

    Correct Answer
    A. True
    Explanation
    The Value Test is used to determine whether a venture offers investors or lenders an attractive rate of return or a high probability of repayment. If the venture passes the Value Test, it means that it meets these criteria and is considered to be a good investment or lending opportunity. Therefore, the statement "The Value Test proves that a venture offers investors or lenders an attractive rate of return or a high probability of repayment" is true.

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  • 19. 

    The business plan include operational and financial details.

    • A.

      True

    • B.

      False

    Correct Answer
    A. True
    Explanation
    The statement is true because a business plan typically includes both operational and financial details. Operational details refer to the strategies and processes that will be implemented to run the business, such as marketing plans, production methods, and organizational structure. Financial details, on the other hand, pertain to the financial projections, budgeting, and funding requirements of the business. Both aspects are crucial for a comprehensive and effective business plan.

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  • 20. 

    What does a Reality Test prove? 

    • A.

      A market really does exist for your product or service

    • B.

      You can actually build or provide it for the cost estimates in the Plan

    • C.

      All of the above

    • D.

      None of the above

    Correct Answer
    C. All of the above
    Explanation
    A Reality Test proves that all of the above statements are true. It confirms the existence of a market for the product or service, as well as the ability to build or provide it within the estimated cost. In other words, a Reality Test validates the feasibility and viability of the business plan.

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  • 21. 

    Trade associations and business directories are one of the primary research tools.

    • A.

      True

    • B.

      False

    Correct Answer
    B. False
    Explanation
    Trade associations and business directories are not one of the primary research tools. While they can be helpful resources for gathering information about specific industries or companies, they are not considered primary research tools. Primary research typically involves collecting data directly from original sources, such as conducting surveys, interviews, or experiments. Trade associations and business directories are more commonly used as secondary research tools, providing existing information that has already been collected by others. Therefore, the statement is false.

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  • 22. 

    The primary research is to collect data firsthand and analyze it.

    • A.

      True

    • B.

      False

    Correct Answer
    A. True
    Explanation
    Primary research refers to the process of gathering data directly from original sources. This can involve conducting surveys, interviews, observations, or experiments to collect firsthand information. Once the data is collected, it is then analyzed to draw conclusions and make informed decisions. Therefore, the statement "the primary research is to collect data firsthand and analyze it" is true.

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  • 23. 

    Primary research tools include secondary research.

    • A.

      True

    • B.

      False

    Correct Answer
    B. False
    Explanation
    The statement is false because primary research tools do not include secondary research. Primary research refers to the collection of original data directly from the source, while secondary research involves the use of existing data and information that has already been collected by someone else. Therefore, secondary research cannot be considered a primary research tool.

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  • 24. 

    Providing that a profitable market exists involves two steps

    • A.

      Show customer interest Proves that target customers actually need or want the product or service.

    • B.

      Document market claims Supports market size and growth rates with facts

    • C.

      A+b

    • D.

      None

    Correct Answer
    C. A+b
    Explanation
    The correct answer is a+b. This is because both steps are necessary to determine if a profitable market exists. Step a involves showing customer interest, which proves that target customers actually need or want the product or service. Step b involves documenting market claims, which supports market size and growth rates with facts. By combining both steps, we can gather enough evidence to determine if a profitable market exists.

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  • 25. 

    The industry is more attractive when substitutes are available.

    • A.

      True

    • B.

      False

    Correct Answer
    A. True
    Explanation
    When substitutes are available in an industry, it means that consumers have alternative options to choose from. This increases competition among the businesses in that industry, which can lead to lower prices, better quality products, and improved customer service. This makes the industry more attractive as it offers more choices and benefits to consumers. Additionally, having substitutes also reduces the risk of dependency on a single product or service, making the industry more resilient to market fluctuations. Therefore, the statement is true.

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  • 26. 

    Collateral Include any assets an entrepreneur pledges to a lender as a security for repayment of the loan.

    • A.

      True

    • B.

      False

    Correct Answer
    A. True
    Explanation
    The statement is true because collateral refers to assets that an entrepreneur pledges as security for the repayment of a loan. These assets act as a guarantee for the lender that if the borrower fails to repay the loan, the lender can seize and sell the collateral to recover the amount owed. Collateral provides a level of protection for the lender and increases the chances of loan approval for the borrower.

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  • 27. 

    A business plan is the best insurance against launching a business destined to fail or mismanaging a potentially successful company.

    • A.

      True

    • B.

      False

    Correct Answer
    A. True
    Explanation
    A business plan is a strategic document that outlines the goals, objectives, and strategies of a business. It helps entrepreneurs evaluate the feasibility of their business idea and identify potential risks and challenges. By carefully planning and considering various aspects of the business, such as market analysis, financial projections, and operational strategies, entrepreneurs can minimize the chances of failure and effectively manage their company. Therefore, having a well-developed business plan acts as a form of insurance, increasing the likelihood of success and reducing the risk of mismanagement.

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  • 28. 

    Hire and train employees is one from start-up companies.

    • A.

      True

    • B.

      False

    Correct Answer
    A. True
    Explanation
    Start-up companies often need to hire and train employees as they are in the early stages of their business and are building their team. They may not have an established workforce and need to bring in new talent to help grow and develop the company. Training is also necessary to ensure that employees are equipped with the necessary skills and knowledge to perform their roles effectively. Therefore, it is true that hiring and training employees is common for start-up companies.

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  • 29. 

    Marketing strategy should include

    • A.

      Target market

    • B.

      Advertising and promotion

    • C.

      Market size and trends

    • D.

      All of them

    Correct Answer
    D. All of them
    Explanation
    A marketing strategy should include all of these elements because they are crucial for the success of any marketing campaign. Identifying the target market helps in understanding the specific needs and preferences of the customers, allowing for better targeting and customization of products or services. Advertising and promotion are essential for creating awareness and generating interest in the target market. Market size and trends provide valuable insights into the competitive landscape and help in identifying opportunities and potential threats. Therefore, including all of these elements in a marketing strategy ensures a comprehensive approach that maximizes the chances of achieving the desired marketing objectives.

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  • 30. 

    -A feature is a descriptive fact about a product or service. (e.g. ergonomically designed, more comfortable handle)

    • A.

      True

    • B.

      False

    Correct Answer
    A. True
    Explanation
    The statement correctly defines a feature as a descriptive fact about a product or service, such as being ergonomically designed or having a more comfortable handle. Therefore, the answer "True" is correct.

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  • 31. 

    A small business must have a stable capital base before any lender will grant a loan.

    • A.

      True

    • B.

      False

    Correct Answer
    A. True
    Explanation
    It is true that a small business must have a stable capital base before any lender will grant a loan. Lenders typically require businesses to demonstrate their ability to repay the loan, and having a stable capital base is a key factor in determining this. A stable capital base ensures that the business has enough funds to cover its expenses and make loan repayments, reducing the risk for the lender. Without a stable capital base, lenders may view the business as high risk and be reluctant to provide a loan.

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  • 32. 

    The Competitive Test evaluates

    • A.

      A company's position relative to its competitors

    • B.

      Management's ability to create a company that will gain an edge over its rivals

    • C.

      All of the above

    • D.

      None

    Correct Answer
    C. All of the above
    Explanation
    The Competitive Test evaluates a company's position relative to its competitors, as well as management's ability to create a company that will gain an edge over its rivals. Therefore, the correct answer is "all of the above." This test assesses both the company's competitive standing and the effectiveness of its management in achieving a competitive advantage.

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Our quizzes are rigorously reviewed, monitored and continuously updated by our expert board to maintain accuracy, relevance, and timeliness.

  • Current Version
  • May 24, 2023
    Quiz Edited by
    ProProfs Editorial Team
  • Apr 25, 2018
    Quiz Created by
    Catherine Halcomb
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