TUTORIAL (ENTREPRENUERSHIP)

1. In the evolutionary process of economic growth, _________ plays the crucial and
indispensable role of providing the “social glue” that binds together both high-tech and
“Main Street” activities.
a. entrepreneurship c. the Internet
b supply and demand d management
. .
2. Entrepreneurs and gazelles have been credited with making disproportionate
contributions to all but which of the following.
a. innovation c. economic renewal
b job creation d unemployment
. .

3. Which of the following statements best describes a “gazelle?”

a. a business with at least 20% growth every year
b a business with no sales growth
.
c. a business that has acquired numerous firms
d an inventor who turned business person
.

4. Gazelles have been responsible for which of the following:

a. some job growth c. 30 percent of all radical
innovations
b 55 percent of innovations d most job turnover
. .
5. ______________ is the economic basis for all entrepreneurial activity.
a. Individuality c. Voodoo economics
b Capitalism d Free enterprise
. .

6. The word entrepreneur is derived from the French entreprendre, which is translated as
a. to apprehend. c. to compete.
b to undertake. d to enter and dare.
. .

7. The entrepreneur is one who

a. dreams all day. c. oversees manufacturing.
b manages. d invents new products.
. .

8. Which of the following characteristics is most important to an entrepreneur?

a. management skills c. friendliness
b neatness d having a nice office.
. .

9. The study of entrepreneurship is

a. based on the field of management c. based on the field of sociology
b based on the field of accounting d interdisciplinary
. .
 10. Which economist associated the “risk bearing” activity in the economy with the entrepreneur?
a. Richard Cantillon c. Peter F. Drucker
b Robert C. Ronstadt d Jean Baptiste Say
. .

11. Every person has the and to pursue a career as an entrepreneur

a. stubbornness; stupidity c. rights; regulations
b. potential; free choice d. obligation; duty
12. Sources of information available to entrepreneurs include
a. journals. c. casual conversation.
b. moonlighting in another job. d. attending civic events.

13. Entrepreneurs
a. are driven by intense commitment and perseverance.
b. are egomaniacs.
c. loners who never fit in to typical firms.
d. are never satisfied.

14. Which source of information about entrepreneurial characteristics is direct observation?

a. Biographies and entrepreneurs c. Books about entrepreneurs
b. Empirical research d. Television biographies

15. Which is not a source of entrepreneurship research?

a. textbooks c. conferences
b. biographies d. water cooler conversation

16. Biographies, journals, and periodicals are examples of what research source?
a. direct observations c. presentations
b. publications d. primary research

17. Characteristics often attributed to the Entrepreneur include:

a. Commitment, determination, and perseverance
b. Prefers to be a loner
c. Power hungry
d. Ability to be indecisive

18. Which is not a trait of a successful entrepreneur?

a. desire to achieve c. innovation
b. initiative d. trouble fitting in

19. Entrepreneurs with a drive to achieve want to

a. compete. c. take great risks.
b. watch others succeed. d. control and dominate.

20. Which of the following is not a trait of successful entrepreneurs?

a. initiative c. perseverance
b. frustration d. strategic thinking

21.Corporate entrepreneurial activity takes place the firm.

a. only with outside suppliers to c. both inside and outside
b. with anyone outside d. Inside
 22. Which of the following was one of the factors Drucker mentions to explain the development of the
entrepreneurial economy?
a. the rapid evolution of technology and knowledge
b. demographic trends
c. government regulation
d. a robust venture capital market

23. One reason why corporate entrepreneurship has done so well is that it allows organizations to
a. increase salaries. c. encourage high risk taking.
b. fire the dead wood. d. tap the innovative talents of their people.
24. Intrapreneurship is also referred to as:
a. inside entrepreneurship c. corporate entrepreneurship
b. internal entrepreneurship d. outside entrepreneurship

25. ____people thoroughly understand the concept of corporate entrepreneurship.

a. Just about all c. Many
b. Most d. Few

26. The major thrust of corporate entrepreneurship is to

a. encourage greater risk taking. c. encourage innovation.
b. raise profitability. d. increase morale.

27. All of the following are reasons for the growth of corporate entrepreneurship except
a. a desire to dramatically increase profitability.
b. a rapidly growing number of new and sophisticated competitors.
c. a sense of distrust in the traditional methods of corporate management.
d. an exodus of some of the best people out of corporations.

28. Which of the following helps account for the rise of interest in corporate entrepreneurship?
a. There is a decrease in the number of sophisticated competitors.
b. Government regulation of small entrepreneurs.
c. Corporations are now losing some of their best people.
d. A general increase in the number of competitors.

29. Which of the following is an obstacle to corporate entrepreneurship?

a. orientation to the market
b. a system of feedback and positive reinforcement
c. traditional management techniques
d. rewards based upon results

30. In following the rules for innovation, a manager should do all of the following except
a. encourage action. c. punish failure.
b. use formal meetings whenever possible. d. reward performance.

31.The Greek word ethos means

a. mode of conduct. c. elan.
b. morale. d. esprit de corps.
32. The topic of ethics has been important in philosophical thought since the time of
a. Virgo. c. Kennedy.
b. Socrates. d. Schumpeter.
 33. Today’s entrepreneurs are faced with many ethical decisions, especially during the _____ stages of
their new venture.
a. early c. late
b. middle d. closing

34. A decision to sell pharmaceuticals that have not been cleared with the Federal Drug Administration is
an example of a(n)
a. illegal and ethical decision. c. illegal and unethical decision.
b. legal and unethical decision. d. legal and ethical decision.

35. Many medical researchers believe that the sale of cigarettes is a(n)
a. illegal and ethical decision. c. illegal and unethical decision.
b. legal and unethical decision. d. legal and ethical decision.

36. A decision to sell toys that pass minimum safety standards but can often result in minor accidents to
children is an example of a(n)
a. illegal and ethical decision. c. illegal and unethical decision.
b. legal and unethical decision. d. legal and ethical decision.
37. In the _____ sense, ethics provides the basic rules or parameters for conducting any activity in an
“acceptable manner.”
a. abstract c. narrowest
b. broadest d. most concrete
38. Ethics represents a set of principles prescribing a behavioral code that explains what is
a. good and right. c. both a and b.
b. bad and wrong. d. profit maximization for the firm.
39. A definition of ethics in such a rapidly changing environment must be based more on _____ than on a
static code.
a. rules c. deterministic rule
b. a process d. policy
40. Instead of relying on a set of fixed ethical principles, it is important to develop
a. an ethical process. c. a concerned process.
b. a luxury process. d. a vacillating process.
41.Which of the following questions concerning innovation is not relevant?
a. “What is the problem?” c. “What costs are involved?”
b. “Whom does it affect?” d. “When the product goes to market?”
42. Which of the following statements is true?
a. Innovation is the specific function of entrepreneurship.
b. Innovation is the process by which entrepreneurs consume marketable ideas.
c. Innovation does not involve change.
d. Innovation is the government’s responsibility.
43. Which of the following are keys to understanding opportunity and its development for entrepreneurs?
a. creativity and capital c. background and knowledge
b. innovation and creativity d. incubation and experience
44. Entrepreneur sense potential in business problems by asking
 a. who is to blame and how to relocate them?
b. what about profits?
c. what if and why not?
d. farfetched, unimaginative questions
45. The two most important aspects of creativity are
a. design and solution. c. process and people.
b. intelligence and technical competence. d. capital and opportunity.
46. Which of the following statements is true?
a. People are born with creativity and can do nothing to change their level of creativity.
b. People can learn to be creative.
c. Creativity has nothing to do with learning.
d. The creative mind cannot be developed.

47. Some ways to develop a creative mind include

a. reading a variety of textbooks on entrepreneurship.
b. creative minds are born not made.
c. observing other entrepreneurs.
d. getting away from it all.
48. The incubation process involves which of the following?
a. working harder c. talking with friends
b. letting the subconscious work d. changing jobs
49. Which of the following statements is true?
a. The right brain helps people analyze and verbalize.
b. The right brain helps people understand analogies and imagine things.
c. The left brain helps people understand analogies and imagine things.
d. Right and left brain concepts are meaningless.
50. Which of the following can help speed up the idea process?
a. working harder c. taking breaks while working
b. seeing new movies d. intuition
51.When one designs a unique good or service, the individual is said to have used a(n) ____approach to
starting the business.
a. new-new c. old-new
b. old-old d. new-old
52. When one discusses upside gain and downside loss, one is talking about
a. inventory turnover. c. asset pricing.
b. risk versus reward. d. liquidation pricing
53. “Piggybacking” one’s way into business involves using a ____approach.
a. new-new c. new-old
b. old-new d. old-old
54. Which of the following is not a key question a prospective buyer needs to ask in buying a business?
a. Why is the owner selling? c. How many of the personnel will remain
with the firm?
b. What is the owner’s personal net worth? d. What type of competition exists?
55. Which of the following is an intangible asset?
a. goodwill c. plant
b. inventory d. machinery
 56. An advantage to buying an on-going business is
a. reduced concern over future operations. c. it may be purchased at a bargain price.
b. time and effort are reduced d. all of the above.
57. A key question to ask when buying an on-going small business is which of the following?
a. How old is the business? c. Can you become a millionare by buying
this business?
b. Where should you retire someday? d. How many personnel are going to remain?
58. When buying a business, competition must be investigated because
a. price competition may affect profits. c. competition may be spending more money
on advertising than you.
b. new competition may reduce market d. all of the above
share.

59. Which of the following is a question which can be sidestepped when buying a business?
a. Where should the business be located? c. What pricing strategy should the firm use?
b. What types of customers does this store d. All can be sidestepped.
attract?
60. Business related reasons for selling may include all but which of the following?
a. The owner may be in trouble with c. Changes in zoning which affect the
suppliers. business.
b. Changes in leasehold conditions. d. All of the above.
61.Items that can qualify for patent protection include all of the following except
a. machines. c. processes.
b. products. d. ideas.
62. Design patent protection lasts for _____ years.
a. 10 c. 14
b. 12 d. 20
63. Patents that are not design patents have _____ years of protection.
a. l5 c. 22
b. 20 d. 25
64. A patent gives the holder a temporary
a. profit. c. monopoly.
b. oligopoly. d. specification.
65. There are two parts to a patent application, claims and .
a. percentage c. value
b. specification d. integration
66. The two parts to a patent application are specification, and .
a. claims c. value
b. percentage d. perception
67. The text of a patent application is known as the
a. specification. c. concept.
b. particulars. d. value.
68. The text of a patent application is known as the
a. presentable data. c. context.
b. claim. d. specification.
 69. That part of a patent application which identifies the features that are protected are known as the
a. particular. c. identification.
b. claim. d. essence.
70. That part of a patent application which identifies the features that are protected are known as the
a. specification. c. claim.
b. illustration. d. concept.

71.At start-up time, forms of financing includes all but which of the following.
a. equity c. equitable payback
b. private equity d. bank loans
72. Which of the following is (are) sources of capital for entrepreneurs:
a. equity c. auto leasing
b. debit d. credit cards

73. Many new ventures find that debt financing is

a. necessary. c. not an important consideration.
b. a waste of time. d. their major source of funds.
74. Approximately how many commercial banks are there in this country?
a. 40,000 c. l7,000
b. 8,000 d. 20,000
75. Which of the following is not a question commonly asked by banks of entrepreneurs?
a. What do you plan to do with the money? c. What interest rate did you have in mind?
b. How much do you need? d. How will you repay the loan?
76. When starting a business, which of the following sources of financing are least likely to be used?
a. trade credit c. leasing companies
b. factors d. insurance companies
77. When starting a business, which of the following sources of financing are most likely to be used?
a. trade credit c. leasing companies
b. factors d. insurance companies
78. Which of the following would be most commonly used for short-term financing?
a. insurance companies c. finance companies
b. trade credit d. leasing companies
79. Which of the following would be most commonly used for medium-term financing?
a. insurance companies c. finance companies
b. trade credit d. leasing companies
ANS: C

80. Which of the following would be most commonly used for long-term financing?
a. insurance companies c. finance companies
b. trade credit d. leasing companies

81.It is reported that new firms have emerged in the United States every year since the early 1990’s.
a. 600,000 c. 22,000
b. 100,000 d. 230,000
82. The entrepreneurial motivations of individuals usually relate to which of the following factors?
a. the environment c. the venture
b. the entrepreneur d. all of the above
83. Researchers have described a “fully developed new firm” with a number of characteristics including:
a. requires the full time commitment c. has not hired any individuals
b. has formal financial support d. a and b both apply

84. Many entrepreneurs lack for their new venture.

a. innovation c. objectivity
b. intelligence d. both a and b

85. Which of the following is critical to a product’s success?

a. timing c. objectivity
b. marketing approach d. all of the above

86. When a customer sees a product that is superior to its competitors, ______ becomes less important.
a. size c. quantity
b. color d. price

87. A new venture should be

a. cheap. c. easy to copy.
b. unique. d. inferior to its competitors.

88. A common pitfall in selecting a new venture is

a. poor financial understanding. c. real insight into the market.
b. proper objective evaluation. d. none of the above.

89. Timing is especially critical in which area?

a. the new venture profitability method c. accounting
b. marketing d. the economy

90. Many entrepreneurs lack

a. knowledge of their product. c. drive.
b. venture uniqueness. d. the willingness to put in long hours.

91. A market is
a. a group of consumers who have purchasing power and unsatisfied needs
b. a way of gaining consumer data
c. a segment of the economy
d. a group of known purchasers

92. The key to marketing analysis is

a. secondary data c. marketing research
 b. psychographic information d. marketing response data

93. All of the following techniques are used in gathering primary data except
a. observational methods c. surveys
b. analysis of company financial records d. experimentation
94. In defining research objectives, the entrepreneur should include
a. local weather c. competitors research objectives
b. consumer tastes d. market experts
95. Surveys include contact by
a. mail c. personal interviews
b. telephone d. all of the above

96. Secondary data consists of

a. internal data only c. existing information
b. external data only d. newly developed primary research
97. Which of the following is not a method of collecting primary data?
a. review of government publications c. mail survey
b. telephone d. observation
98. Which of these is the most expensive to conduct?
a. phone surveys c. mail surveys
b. interviews d. all are of equal cost

99. When developing a survey, you should consider

a. including questions only pertaining to the study.
b. ask leading and biased questions.
c. giving concise but incomplete instructions.
d. the personality of the respondents.

100. Which one of these typically has the lowest response rate?
a. direct face-to-face contact c. phone survey
b. interviews d. mail survey

101.Financial information is important to entrepreneurs because:

a. it pulls together all the information presented in other segments of the business.
b. it quantifies all the assumptions concerning business operations.
c. it answers all questions about the business and the entrepreneur.
d. a and b are both correct.

102. Which of the following are not true about financial assumptions?
a. They explain how the numbers are derived.
b. They should be clear and precise.
c. They are the most integral part of the financial segment.
d. They do not necessarily correlate with information from other parts of the business.
103. One type of budget used by the entrepreneur is
a. an operating budget. c. a cost budget.
b. a project budget. d. an R & D budget.
104. A budget that is a statement of estimated income and expenses over a specified period of time is
referred to as an
a. anticipated budget. c. entrepreneurial budget.
b. operating budget. d. expected results budget.
105. The first step in constructing an operating budget is
a. preparation of the sales forecast. c. a cash flow estimate.
b. a cost preparation. d. estimating fixed costs.

106. In the simple linear regression analysis equation, Y = a + bx, x represents

a. expected sales. c. the slope of the line.
b. the factor on which sales are dependent. d. the vertical intercept.
107. A manufacturing firm needs to establish which of the following budgets?
a. a profit budget c. a cost budget
b. a material purchases budget d. an accounting budget

108. A variable cost

a. changes in the same direction and in inverse proportion to changes in operating activity.
b. changes in the opposite direction and in direct proportion to changes in operating activity.
c. changes in the same direction and in direct proportion to changes in operation activity.
d. is the same as labor costs
109. For a manufacturing firm, the production budget represents
a. the number of units that must be produced to break even.
b. the number of units that must be produced to achieve the desired profit level.
c. the number of units that must be produced in order to meet the sales forecast.
d. the number of units that must be produced to cover R & D costs.
110. In the simple linear regression analysis equation, Y = a + bx, b represents
a. the slope of the line. c. the constant.
b. expected sales. d. the factor on which sales are dependent.
111.Planning entails the information of ______ & ______ for the future of a venture.
a. goals; directions c. data; market
b. data; directions d. goals; market
112. In planning, there are a number of critical factors that must be addressed. One is
a. having a calendar. c. commitment.
b. the timetable involved. d. a firm plan.

113. Which of the following is not a critical factor that should be addressed in planning a venture?
a. milestones c. specific profit goals
b. flexibility d. realistic goals

114. The comprehensive business plan should be the result of

a. meetings and reflections on the direction of the venture.
b. continuous operations of the venture.
c. investor’s promises for large amounts of capital.
d. the entrepreneur’s vision.
115. Which of the following is a pitfall to avoid in planning?
a. lack of priorities
b. lack of profit
c. no admission of possible success in the plan
d. refusal to write items down
116. What is one possible way to avoid the pitfall of no market niche (segment)?
a. conduct a market analysis
b. check market niches in marketing journals to determine which one the venture falls into
c. clearly specify which market niche the venture plans to target
d. create a new one
117.
A business plan should illustrate
a. the current status of the entrepreneur. c. the desires of the competitors.
b. the projected needs of the new business. d. the vision of the entrepreneur.
118. An indicator of the planning pitfall of failure to anticipate roadblocks is
a. recognition of future problems. c. a contingency or alternative plan.
b. no admission of possible flaws in the plan. d. a good work force.
119. An indicator of the planning pitfall “no commitment or dedication” is
a. no experience in the business. c. no recognition of future problems.
b. excessive procrastination. d. lack of understanding about the industry.
120. An indicator of the planning pitfalls of no realistic goals is
a. lack of timetable to accomplish things. c. excessive procrastination.
b. missed appointments. d. lack of desire to invest personal money.