Quiz: Entrepreneurship And Small Business
Chapter 6 quiz from Understanding Business text book.
- 1.
An entrepreneur:
- A.
Manages a business for someone else
- B.
Owns controlling interest in the stock of a major corporation
- C.
Manages a business that operates in more than one country
- D.
Accepts the risk of starting and running a business
Correct Answer
D. Accepts the risk of starting and running a businessExplanation
The correct answer is "accepts the risk of starting and running a business." This answer accurately describes the role of an entrepreneur. Entrepreneurs are individuals who take on the financial and personal risks associated with starting and operating a business. They are willing to invest their time, money, and resources into a venture, with the understanding that there is a possibility of failure. This answer distinguishes entrepreneurs from individuals who manage businesses for others, own controlling interests in major corporations, or operate businesses in multiple countries.Rate this question:
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- 2.
One way an intrapreneur differs from an entrepreneur is that:
- A.
Intrapreneurs start nonprofit organizations while entrepreneurs start profit-seeking businesses
- B.
Intrapreneurs are practical while entrepreneurs are creative
- C.
Intrapreneurs work within existing corporations while entrepreneurs assume the risks of starting their own business
- D.
Intrapreneurs limit their efforts to financial investments, while entrepreneurs are involved in all areas of business activity
Correct Answer
C. Intrapreneurs work within existing corporations while entrepreneurs assume the risks of starting their own businessExplanation
The correct answer is that intrapreneurs work within existing corporations while entrepreneurs assume the risks of starting their own business. This means that intrapreneurs are individuals who innovate and take risks within the established structure of a company, while entrepreneurs are individuals who take the initiative to start their own businesses and bear the risks associated with it.Rate this question:
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- 3.
When looking at the advantages and disadvantages of starting various types of businesses, it apears that:
- A.
Businesses that are easy to start often offer the greatest potential for long term growth and profits
- B.
The greatest security is available in the manufacturing sector
- C.
Businesses that offer a chance for high profits tend to be difficult to start and hard to keep going
- D.
The reason the service sector is growing so rapidly is that service firms are easy to start, easy to keep going, and offer both growth opportunities and plenty of security
Correct Answer
C. Businesses that offer a chance for high profits tend to be difficult to start and hard to keep goingExplanation
Starting a business that offers a chance for high profits tends to be difficult and hard to sustain because such businesses usually require significant investments, specialized skills, and market expertise. These businesses often face intense competition and rapidly changing market conditions, making it challenging to establish a strong foothold and maintain profitability in the long run. Additionally, high-profit businesses may require continuous innovation and adaptation to stay ahead of competitors, which further adds to the difficulty of sustaining success.Rate this question:
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- 4.
Manny is about to graduate from college, and is looking for full time employment. He has decided to concentrate on looking for a job with a major corporation. His job search strategy:
- A.
Makes sense, because managerial skills can only be fully developed by working for big firms
- B.
Is smart because major corporations are still the most important source of employment growth in the United States
- C.
Indicates that Manny wants a chance to utilize his entrepreneurial talents
- D.
Is likely to limit his job prospects since most new jobs are with small businesses
Correct Answer
D. Is likely to limit his job prospects since most new jobs are with small businessesExplanation
The given correct answer states that Manny's job search strategy is likely to limit his job prospects since most new jobs are with small businesses. This implies that Manny's focus on major corporations may cause him to miss out on potential job opportunities in small businesses, which are actually the main source of employment growth in the United States. Therefore, his strategy may not be the most effective in terms of maximizing his chances of finding full-time employment after graduating from college.Rate this question:
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- 5.
An examination of statistics about people who start their own businesses reveal that:
- A.
Many small business owners got their entrepreneurial idea from a previous job they held
- B.
It is rare for managers with experience working withing big corporations to start their own businesses
- C.
People who start their own businesses right after graduating from high school or college are generally more successful than those who first work for someone else
- D.
Most small business owners have a great deal of personal wealth
Correct Answer
A. Many small business owners got their entrepreneurial idea from a previous job they heldExplanation
Many small business owners got their entrepreneurial idea from a previous job they held. This suggests that working in a particular industry or job can provide individuals with valuable insights and experiences that inspire them to start their own business. These individuals may identify gaps or opportunities in the market based on their previous work experience, leading them to develop innovative ideas and launch their own ventures. This also implies that practical knowledge gained from previous employment can be instrumental in the success of a new business.Rate this question:
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- 6.
Which of the following suggestions would and experienced entrepreneur most likely give to someone who is thinking about starting their own business?
- A.
Starting a new business is always better than buying an existing firm
- B.
Even small businesses must keep accurate records
- C.
In order to keep costs low when the company is just getting started, wait at least a year before hiring and accountant or lawyer
- D.
Prior business experience is not really important in managing a new firm
Correct Answer
B. Even small businesses must keep accurate recordsExplanation
An experienced entrepreneur would most likely give the suggestion that even small businesses must keep accurate records. This is because keeping accurate records is essential for the success and growth of any business, regardless of its size. Accurate records help in tracking expenses, managing cash flow, making informed financial decisions, and ensuring compliance with legal and tax requirements. Without proper record-keeping, it becomes difficult to assess the financial health of the business, identify areas of improvement, and plan for the future. Therefore, it is crucial for small businesses to prioritize accurate record-keeping from the very beginning.Rate this question:
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- 7.
The primary focus in managing a business should likely be:
- A.
Human relations and accounting
- B.
Financing and planning
- C.
Marketing and public relations
- D.
Staffing and controlling
Correct Answer
B. Financing and planningExplanation
The primary focus in managing a business should likely be financing and planning. This is because effective financial management ensures that the business has the necessary resources to operate and grow, while planning allows for setting goals, making strategic decisions, and allocating resources effectively. By focusing on financing and planning, businesses can ensure their long-term sustainability and success.Rate this question:
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- 8.
When seeking a loan from a bank, an entrepreneur hoping to start a new business should realize that bankers will:
- A.
Expect to receive a share of ownership in the busineses in exchange for their loan
- B.
Expect the entrepreneur to have a well prepared business plan
- C.
Generally make loans only to small businesses in computer related industries
- D.
Offer only only very short-term financing
Correct Answer
B. Expect the entrepreneur to have a well prepared business planExplanation
When seeking a loan from a bank, an entrepreneur hoping to start a new business should realize that bankers will expect the entrepreneur to have a well-prepared business plan. This is because a business plan demonstrates that the entrepreneur has thoroughly thought through their business idea, including its market potential, financial projections, and operational strategies. A well-prepared business plan provides the bank with confidence that the entrepreneur has a clear vision and a solid understanding of the risks and opportunities associated with their business venture. It also helps the bank assess the viability and profitability of the business, which is crucial in determining whether to approve the loan.Rate this question:
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- 9.
Luis is a partner in a firm that specializes in producing vitamins and health food products. While the business is considered small by U.S. standards, he is attempting to persuade his partner to expand internationally. Luis would list which of the following as an advantage of going international?
- A.
Exporting can absorb excess inventory
- B.
Marketing will encounter cultural similarities in prospective markets
- C.
The company can take extra time to ship internationally
- D.
Selling your products in other markets may shorten their life cycle
Correct Answer
A. Exporting can absorb excess inventoryExplanation
Exporting can absorb excess inventory because it allows the company to sell its products in international markets, which can help to reduce the amount of inventory that is not being sold domestically. By expanding internationally, the company can tap into new markets and reach a larger customer base, increasing the chances of selling their products and reducing the risk of having excess inventory. This can help to improve the company's overall profitability and efficiency.Rate this question:
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- 10.
One of the main reasons why many American small businesses are not involved in global business transactions is:
- A.
There is only a limited market for their products
- B.
The government has been against active participation
- C.
Many potential exporters do not know how to get started
- D.
American products are looked upon as being inferior
Correct Answer
C. Many potential exporters do not know how to get startedExplanation
Many potential exporters do not know how to get started in global business transactions. This could be due to a lack of knowledge or understanding of the necessary processes and requirements involved in exporting products internationally. Without the proper guidance and resources, small businesses may feel overwhelmed and unsure of how to navigate the complexities of global trade. This lack of knowledge and guidance can be a significant barrier for American small businesses to actively participate in global business transactions.Rate this question:
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