All but which of

the following is
considered to be a
myth associated
with
entrepreneurship?

Successful entrepreneurs are born not made

A)

First ventures are always successful

B)

All entrepreneurs must willingly invest significant sums of money

C)

Successful entrepreneurs must have a break-through invention

D)

An entrepreneur faces extraordinary business risks

E)
Feedback:
The correct answer is "b". Please see the discussion under Entrepreneurship Myths,
pages 311-312.

2 INCORRECT
A/An ______ is best described by stating it is any business that is independently owned
and operated and is not dominate in its market.

strategic alliance
A)

corporation
B)

entrepreneurship
C)

proprietorship
D)

small business
E)
Feedback:
The correct answer is "e". Please see the discussion under A Distinction between
Entrepreneurial Venture and a Small Business, page 312.

3 INCORRECT
For small business owners, one of the most important objectives is _______.

market presence
A)

growth
B)

profitability
C)

adaptability
D)

innovation
E)
Feedback:
The correct answer is "c". Please see the discussion under A Distinction between
Entrepreneurial Venture and Small Business, page 312.
4 INCORRECT
Which of the following is not considered a common characteristic of an entrepreneur?

Internal locus of control

A)

High need for achievement

B)

Self-confidence
C)

External locus of control

D)

Willingness to take risks

E)
Feedback:
The correct answer is "d". Please see the discussion under Characteristics of
Entrepreneurs, page 314.

5 INCORRECT
Bobby believes that what takes place within his new company is mostly the result of fate
or factors that are outside of his control. It could be stated that Bobby possesses a/an
______.

innovative spirit
A)

intrapreneurship
B)

internal locus of control

C)

high need for achievement

D)

external locus of control

E)
Feedback:
The correct answer is "e". Please see the discussion under Characteristics of
Entrepreneurs, page 314.

6 INCORRECT
The entrepreneur who is committed to the entrepreneurial effort because it makes good
business sense is classed as a/an _____.

inventor
A)

opportunist
B)

hacker
C)

craftsman
D)

craftsperson
E)
Feedback:
The correct answer is "b". Please see the discussion under Manager's Notes 8.2, An
Entrepreneurial Classification System, page 315.

7 CORRECT
Melissa is one of the newest and most successful entrepreneurs in the technology
 industry. She handles numerous dealings with other companies for the exchange of
goods and services. Her primary goal is to ensure that all parties involved receive
favorable and acceptable terms. Melissa is most probably excellent at the entrepreneurial
skill of _______.

negotiating
A)

networking
B)

leadership
C)

analysis
D)

alliance building
E)
Feedback:
The correct answer is "a". Please see the discussion under Negotiation Skills, page 316.

8 INCORRECT
The steps involved in an entrepreneurial endeavor include all but which one of the
following?

Business plan formulation

A)

Obtaining financing
B)

Selecting the type of legal structure

C)

Hiring a partner
D)

Adapting to growth
E)
Feedback:
The correct answer is "d". Please see the discussion under Starting and Managing an
Entrepreneurship, page 319.

9 CORRECT
The ideas for new businesses that are obtained by entrepreneurs are derived from many
sources. These various sources include all but _______.

replication of an existing business

A)

trade journals
B)

trade shows
C)

family members
D)

children
E)
Feedback:
The correct answer is "a". Please see the discussion under New Business Ideas, pages
319-320.

10
Common reasons for entrepreneurial failure include all but which one of the following?
UNANSWERED

Poor implementation
A)

Lack of capital
B)

Adequate financial support

C)

Faulty product design

D)

Ineffective human resources

E)
11
INCORRECT A/An ________ is defined as the blueprint describing the business strategy for entering
the marketplace and explains the business to potential investors.

business alliance
A)

spin-off
B)

intrapreneurship
C)

competitor analysis
D)

business plan
E)
Feedback:
The correct answer is "e". Please see the discussion under Business Plan, page 321.

12
INCORRECT Of the following, which one is not considered a key component of a business plan?

Sources of funding
A)

Market trend analysis

B)

Methods for dissolution of the organization

C)

Description of products or services

D)

Expansion plans
E)
Feedback:
The correct answer is "c". Please see the discussion under Business Plan, page 321.

13
INCORRECT A(n) ________ is defined as a form of business that is an association of two or more
people acting as co-owners of a business.

proprietorship
A)

partnership
B)
 INC
C)

corporation
D)

conglomerate
E)
Feedback:
The correct answer is "b". Please see the discussion under Partnership, page 322.

14 CORRECT
Which one of the following would not be considered an advantage to a partnership
formation?

Potential for double taxation

A)

Less governmental control

B)

Ease of formation
C)

Direct share of profits

D)

Division of labor and management responsibilities

E)
Feedback:
The correct answer is "a". Please see the discussion under Table 8.1, Partnership and
Corporation Forms of Ownership, page 324.

15 CORRECT
Which one of the following would not be considered a disadvantage of a corporation?

Limited continuality of life of enterprise

A)

Extensive government regulations of activities

B)

High incorporation fees

C)

Corporate capital, profits, dividends, and salaries are double taxed

D)

Activities limited to those stated in charter

E)
Feedback:
The correct answer is "a". Please see the discussion under Table 8.1, Partnership and
Corporation Forms of Ownership, page 324.

16
INCORRECT Entrepreneurships require financial backing in order to get started in the business world.
Which of the following is not one of the methods commonly utilized to obtain the
financial resources needed?

Equity
A)

Commercial loans
B)

Personal finances provided by friends

C)
 Venture capitalists
D)

Public offerings
E)
Feedback:
The correct answer is "c". Please see the discussion under Sources of Financial
Resources, page 324.

17
INCORRECT _________ financing is raising money by selling part of the ownership of the business to
investors.

Debt
A)

Equity
B)

Venture capitalist
C)

Public offering
D)

Spin-off
E)
Feedback:
The correct answer is "b". Please see the discussion under Equity Financing, page 324.

18
INCORRECT Of the following, which one would not be considered an alternative to independent
entrepreneurship?

Franchise
A)

Spin-off
B)

Intrapreneurship
C)

Extrapreneurship
D)

Business unit within a larger corporate structure

E)
Feedback:
The correct answer is "d". Please see the discussion under Alternative Forms of
Entrepreneurship, page 328.

19
INCORRECT Of the following, which is best identified as an independent entrepreneurship that
produces a product or service that originated in a large company?

Diversification
A)

Intrapreneurship
B)

Trade-off
C)

Franchise
D)
 Spin-off
E)
Feedback:
The correct answer is "e". Please see the discussion under Spin-Offs, page 328.

20
INCORRECT Of the following, which is best identified when a business with an established name and
product is sold to additional owners along with the rights to distribute product?

Spin-off
A)

Intrapreneurship
B)

Trade-off
C)

Entrepreneurship
D)

Franchise
E)
Feedback:
The correct answer is "e". Please see the discussion under Franchises, page 329.

21
INCORRECT Management tactics purported to maximize innovation for an entrepreneurship include
all but which of the following items?

Cutting of losses
A)

Culture
B)

Benchmarking
C)

Customer orientation
D)

Capabilities
E)
Feedback:
The correct answer is "c". Please see the discussion under Table 8.2, Management
Tactics to Maximize Innovation-The Five Cs, page 334.

22
INCORRECT ______ is best described as doing something differently and has been described as
discontinuous or complementary change.

Entrepreneurship
A)

Innovation
B)

Spin-off
C)

Variance
D)

Enterprise
E)
Feedback:
 The correct answer is "b". Please see the discussion under innovation, page 330.

23
INCORRECT In franchising, the entrepreneur assumes fewer risks because the franchise provides all
but which one of the following?

Established market for the product

A)

Management assistance in operating the business

B)

Economies of scale for purchasing

C)

Oversale of rights
D)

Favorable image for the product

E)
Feedback: