Question 1

Most small firms have problems obtaining finance to develop new products.

Accepted Answer

A) True 
 B)False  TRUE

Question 2

Small firms often serve a localised market.

Accepted Answer

A) True 
 B)False  TRUE

Question 3

Small firms can adopt strategies that will help them grow. Typically, these do not include

Accepted Answer

A)  workforce and management training. 
B)  product innovation. 
C)  concentrating on overseas markets. 
D)  the use of external finance. 
A)  workforce and management training. 
B)  product innovation. 
C)  concentrating on overseas markets. 
D)  the use of external finance. C

Question 4

Summarise the forms of financial support available from government for small businesses in the UK.

Accepted Answer

Financial support takes many forms inclu

Question 5

Which of the following would not hinder the success of micro- sized firms in the UK?

Accepted Answer

A)  Lack of economies of scale 
B)  Banks not willing to lend on reasonable terms 
C)  Lack of marketing or product credibility 
D)  Owners worried about managers establishing non profit- maximising objectives 
E)  Lack of key management skills 
A)  Lack of economies of scale 
B)  Banks not willing to lend on reasonable terms 
C)  Lack of marketing or product credibility 
D)  Owners worried about managers establishing non profit- maximising objectives 
E)  Lack of key management skills

Question 6

Small firms typically find it easier than large firms to access finance.

Accepted Answer

A) True 
 B)False

Question 7

Several factors help small firms succeed. Which of the following is not one of them?

Accepted Answer

A)  Personal service to customers 
B)  Ease of marketing overseas 
C)  Innovative entrepreneurial activity 
D)  Quality of service 
A)  Personal service to customers 
B)  Ease of marketing overseas 
C)  Innovative entrepreneurial activity 
D)  Quality of service

Question 8

Which strategies will lead to fast growth of small firms?

Accepted Answer

If we ignore the personal qualities of t

Question 9

Several factors make it difficult for SMEs (small and medium- sized enterprises) in the UK to succeed. Which of the following is not one of them?

Accepted Answer

A)  Lack of economies of scale 
B)  Lack of marketing or product credibility 
C)  The principal- agent problem 
D)  Banks are not willing to lend on reasonable terms 
A)  Lack of economies of scale 
B)  Lack of marketing or product credibility 
C)  The principal- agent problem 
D)  Banks are not willing to lend on reasonable terms

Question 10

Bank loans to small firms are often offered at relatively high rates. This is partly because of

Accepted Answer

A)  adverse section. 
B)  large firms are using most of the available funds from the banking sector. 
C)  small firms offer low risks to the banking system. 
D)  small firms can afford to pay more. 
A)  adverse section. 
B)  large firms are using most of the available funds from the banking sector. 
C)  small firms offer low risks to the banking system. 
D)  small firms can afford to pay more.

Question 11

Fast growing firms tend not to bring in specialist managers from outside the firm.

Accepted Answer

A) True 
 B)False

Question 12

Which of the following market structures will be represented by small and medium- sized firms?

Accepted Answer

A)  Perfect competition 
B)  Monopolistic competition 
C)  Oligopoly 
D)  Monopoly 
E)  All of the above 
A)  Perfect competition 
B)  Monopolistic competition 
C)  Oligopoly 
D)  Monopoly 
E)  All of the above

Question 13

How do the EU and UK define small firms?

Accepted Answer

The UK follows the EU system. There are

Question 14

In the UK, from 1980 onwards, there was an increase in the number of SMEs (small and medium- sized enterprises). This cannot be attributed to

Accepted Answer

A)  anti- monopoly policy. 
B)  downsizing and outsourcing. 
C)  higher unemployment between 1980 and 1995. 
D)  the growth of the service sector. 
A)  anti- monopoly policy. 
B)  downsizing and outsourcing. 
C)  higher unemployment between 1980 and 1995. 
D)  the growth of the service sector.

Question 15

Why are SMEs often suited to niche markets?

Accepted Answer

Niche markets offer specialist products

Question 16

Small firms can adopt strategies that will help them grow. These do not include

Accepted Answer

A)  a flat management structure. 
B)  the use of external finance. 
C)  using professional managers. 
D)  workforce and management training. 
A)  a flat management structure. 
B)  the use of external finance. 
C)  using professional managers. 
D)  workforce and management training.

Question 17

If unemployment is high, then typically

Accepted Answer

A)  fewer people will consider self- employment as an option. 
B)  more people will consider self- employment as an option. 
C)  large firms will experience recruitment difficulties. 
D)  the SME market will experience a lower failure rate. 
A)  fewer people will consider self- employment as an option. 
B)  more people will consider self- employment as an option. 
C)  large firms will experience recruitment difficulties. 
D)  the SME market will experience a lower failure rate.

Question 18

Small firms can make changes relatively quickly as

Accepted Answer

A)  they do not have so many competing stakeholders. 
B)  they have fewer co- ordination difficulties. 
C)  they have fewer decision- makers. 
D)  all of the above 
A)  they do not have so many competing stakeholders. 
B)  they have fewer co- ordination difficulties. 
C)  they have fewer decision- makers. 
D)  all of the above

Question 19

How important are SMEs in the UK?

Accepted Answer

SMEs accounted for more than 90% of all

Question 20

It is very easy to set up a small firm. You just to have inform HM Revenue and Customs.

Accepted Answer

A) True 
 B)False

Exam 16: The Small-Firm Sector

Most small firms have problems obtaining finance to develop new products.

Small firms often serve a localised market.

Small firms can adopt strategies that will help them grow. Typically, these do not include

Summarise the forms of financial support available from government for small businesses in the UK.

Which of the following would not hinder the success of micro- sized firms in the UK?

Small firms typically find it easier than large firms to access finance.

Several factors help small firms succeed. Which of the following is not one of them?

Which strategies will lead to fast growth of small firms?

Several factors make it difficult for SMEs (small and medium- sized enterprises) in the UK to succeed. Which of the following is not one of them?

Bank loans to small firms are often offered at relatively high rates. This is partly because of

Fast growing firms tend not to bring in specialist managers from outside the firm.

Which of the following market structures will be represented by small and medium- sized firms?

How do the EU and UK define small firms?

In the UK, from 1980 onwards, there was an increase in the number of SMEs (small and medium- sized enterprises). This cannot be attributed to

Why are SMEs often suited to niche markets?

Small firms can adopt strategies that will help them grow. These do not include

If unemployment is high, then typically

Small firms can make changes relatively quickly as

How important are SMEs in the UK?

It is very easy to set up a small firm. You just to have inform HM Revenue and Customs.

The Business Environment and Business Economics

Economics and the World of Business

Business Organisations

The Working of Competitive Markets

Business in a Market Environment

Demand and the Consumer

Demand and the Firm

Products, Marketing and Advertising

Costs of Production

Revenue and Profit

Profit Maximisation Under Perfect Competition and Monopoly

Profit Maximisation Under Imperfect Competition

An Introduction to Business Strategy

Alternative Theories of the Firm

Growth Strategy

Pricing Strategy

Labour Markets, Wages and Industrial Relations

Investment and the Employment of Capital

Reasons for Government Intervention in the Market

Government and the Firm

Government and the Market

Globalisation and Multinational Business

International Trade

Trading Blocs

The Macroeconomic Environment of Business

The Balance of Payments and Exchange Rates

Banking, Money and Interest Rates

Business Activity, Employment and Inflation

Demand-Side Policy

Supply-Side Policy

International Economic Policy

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