Deck 3: Cognitive Foundations of Entrepreneurship: Creativity and Opportunity Recognition

Question 1

Ideas occur when individuals use existing knowledge they have gained from their experience to generate something new.

Answer 1

True

Question 2

Idea generation is defined as the process through which individuals conclude that they have identified the potential to create something new that has the capacity to generate economic value.

Answer 2

False

Question 3

The confluence approach suggests that basic cognitive processes underlie creative thought.

Answer 3

False

Question 4

A person hears the phrase "small business." She immediately thinks of all the family-owned businesses she knows about. She is using prototypes to interpret the meaning of small business.

Question 5

The production of ideas for something new is called

A) creativity.
B) idea generation.
C) opportunity generation.
D) opportunity cognition.
E) human cognition.

Question 6

Some people are more likely than others to recognize opportunities because they have better access to certain kinds of information and they are able to utilize this information once they have it.

Question 7

Although many approaches to understanding the utilization of information exist,among them a cognitive perspective is especially helpful.

Question 8

The more experience people have in a particular field,the more likely that they will be able to identify opportunities in it.

Question 9

Research shows that people generally cannot be taught to be better able to recognize opportunities.

Question 10

Many entrepreneurs get their start by noticing a need that is not now being met for some people or businesses,and then filling that need - hopefully better than anyone else can.

Question 11

Analogies involve perceiving similarities between objects or events that are otherwise dissimilar.

Question 12

The illusion of control refers to the tendency to assume that our fate is under our control to a greater extent than is actually the case,to believe that we have more control over what happens to us than rational considerations suggest.

Question 13

Long-term memory allows us to retain large amounts of information for long periods of time.

Question 14

Good opportunities are always spotted quickly by entrepreneurs..

Question 15

Successful intelligence refers to a combination of creative intelligence,practical intelligence,and analytic intelligence.

Question 16

Very little that people think,say or do is influenced by cognitive processes.

Question 17

Intelligence is an individual's ability to understand complex ideas,learn from experience,adapt effectively to the world around them,engage in various forms of reasoning,and to overcome a wide range of obstacles.

Question 18

The ability to solve problems in everyday life is called practical intelligence.

Question 19

For something to be the result of creativity,it must be considered original,but does not have to be practical.

Question 20

Making decisions and solving problems are the result of the process of human cognition.

Question 21

Cognitive frameworks representing our knowledge and assumptions about specific aspects of the world are

A) schemas.
B) prototypes.
C) illusions.
D) memories.
E) none of the above.

Question 22

Confirmation bias is

A) the tendency to believe that we can complete more in a given period of time than we actually can.
B) the tendency to notice, process, and remember information that confirms our current beliefs much more readily than information that disconfirms our current beliefs.
C) the tendency to assume that our fate is under our control to a greater extent than is actually the case.
D) the tendency to think that "tilts" are potential errors in our thinking that result from the same general tendency to conserve our limited processing capacity.
E) none of the above.

Question 23

Scientists in charge of creating music CDs created a CD that stored 18 hours of music. Unfortunately,it was unmarketable. The scientists gave up on the project because they created the CD to be the same size as LP records and didn't think about making it smaller. The scientists creating a CD the size of an LP is an example of

A) being under paid for the amount of research they were having to do.
B) being stuck in a mental rut.
C) not getting out of the idea generation stage of development.
D) lack of creativity.
E) not knowing what consumers wanted.

Question 24

There are many ways of gaining a broad and rich knowledge base,but research findings indicate that among the most useful from the point of view of becoming an entrepreneur is

A) having varied work experience.
B) having lived in many different places.
C) having a broad social network.
D) all of the above.
E) none of the above.

Question 25

A way in which concepts can be changed or expanded is through

A) analogy.
B) combining existing ideas.
C) expanding existing concepts.
D) A and B only.
E) A, B, and C.

Question 26

According to the confluence approach,creativity can emerge out of the convergence of several basic resources,including

A) intellectual abilities.
B) a broad and rich knowledge base.
C) an appropriate style of thinking.
D) personality attributes.
E) all of the above.

Question 27

Planning fallacy is one common form of

A) confirmation bias.
B) illusion of control.
C) predictability bias.
D) optimistic bias.
E) control bias.

Question 28

Three dangerous potential errors in our thinking that result from the same general tendency to conserve our limited processing capacity are

A) optimistic bias, confirmation bias, and illusion of control.
B) confirmation bias, illusion bias, and predictability bias.
C) predictability bias, illusion bias, and availability heuristic.
D) optimistic bias, planning fallacy, and illusion bias.
E) illusion of control, planning bias, and optimistic bias.

Question 29

John is a musician playing a long piece of music from memory. This is an example of

A) short term memory.
B) long-term memory.
C) procedural memory.
D) performance memory.
E) none of the above.

Question 30

________ holds a limited amount of information for brief periods of time.

A) Long-term memory
B) Working memory
C) Procedural memory
D) Surface memory
E) Cognitive memory

Question 31

Heuristics are

A) potential errors in our thinking that result from the same general tendency to conserve our limited processing capacity.
B) the tendencies to assume that our fate is under our control to a greater extent than is actually the case.
C) simple rules for making complex decisions or drawing inferences in a rapid and seemingly effortless manner.
D) images that we store in our minds to help us recall facts that we may need in the future.
E) all of the above.

Question 32

The field of cognitive science suggests

A) that creativity emerges out of the confluence of several basic resources.
B) that the intelligence required by entrepreneurs to be creative and to found successful new ventures is much richer and more multifaceted than the kind measured by standard IQ tests.
C) that basic cognitive processes underlie creative thought.
D) that entrepreneurs need creative intelligence, practical intelligence, and analytic intelligence to be truly successful.
E) that entrepreneurs posses a mental framework that assists them in being alert to opportunities.

Question 33

Human cognition is

A) the mental processes through which we acquire information, enter it into storage, transform it, and use it to accomplish a wide range of tasks.
B) the production of ideas for something new.
C) the process through which individuals conclude that they have identified the potential to create something new that has the capacity to generate economic value.
D) identifying opportunities that have emerged from changes in technology, markets, economic conditions, government policies, and demographics.
E) all of the above.

Question 34

A basic finding in entrepreneurship research is that the more experience people have in a given field,

A) the more likely they are to be aware of competitors' strategies.
B) the less likely they are to be aware of existing competitors.
C) the less likely they are to spot obvious opportunities.
D) the more likely they are to identify opportunities in it.
E) the more likely they are to over saturate the market.

Question 35

The process through which individuals conclude that they have identified the potential to create something new that has the capacity to generate economic value is called

A) idea generation.
B) creativity.
C) human cognition.
D) opportunity recognition.
E) none of the above.

Question 36

Any idea for a new product,service,raw material,market or production process that can be successfully exploited so as to generate financial benefits for stakeholders has been viewed as constituting an opportunity. This definition of an opportunity is stated in

A) market terms.
B) economic terms.
C) stakeholder terms.
D) production terms.
E) all of the above.

Question 37

The most basic cognitive system for storing information is known as

A) recall.
B) memory.
C) schemas.
D) heuristics.
E) factual information.

Question 38

Opportunities can emerge from changes in

A) technology.
B) economic conditions.
C) government policies.
D) A and B only.
E) all of the above.

Question 39

Telling someone the distance between Nashville and Memphis would be an example of

A) procedural memory.
B) working memory.
C) factual information.
D) surface knowledge.
E) none of the above.

Question 40

In order for something to be considered a result of creativity,it must be

A) new.
B) practical.
C) profitable; at least 10 % return on investment.
D) A and B
E) A, B, and C

Question 41

Explain what the confluence approach is.

Question 42

Simple rules that guide in making complex decisions are known as

A) perception.
B) sunk costs.
C) heuristics.
D) creativity analysis.
E) planning fallacy.

Question 43

Janet needs to make an important decision about managing her business. As she thinks about the situation,she quickly recalls a similar situation in a friend's business. Because she thinks the friend's situation and hers are similar,she decides to take the same action that her friend did;to use her friend's actions as simple rules to help her through the complicated decision. Unfortunately,Janet is not aware that there was another major factor in her friend's situation that influenced the decision heavily. Which of the following best describes what Janet is using in this situation?

A) Illusion of control.
B) Planning fallacy.
C) Confirmation bias.
D) Signal Detection Theory.
E) Availability heuristic.

Question 44

Explain heuristics. Can they be both positive and negative?

Question 45

Assume that you are remembering the first time you met a particular person. In recalling this memory,you are using

A) factual knowledge.
B) working knowledge.
C) prototype knowledge.
D) recall entrepreneurship.
E) creative intelligence.

Question 46

Define analytical,creative,and practical intelligence and explain why all three are important for entrepreneurs.

Question 47

Explain the relationship between becoming an entrepreneur and the concept of illusion of control.

Question 48

Say you are sitting in class and the professor is saying something that is contradictory to what you believe to be true. Since it contradicts what you believe,you do not think it is important. Your actions represent

A) control of illusion.
B) prototypes.
C) the Sony phenomenon.
D) confirmation bias.
E) vehicle creativity.

Question 49

Assume that you are an entrepreneur. You believe strongly that customers normally like to see a lower price on products - "Lower price sells more product." You attended a professional conference recently and heard a speaker say that a good approach would be to try to make your product different and valuable in the eyes of the customer and charge a higher price. At the same conference,you heard another speaker argue that "yes,customers do like to see lower prices." It sounded to you like the second speaker presented a more logical argument. The first speaker's ideas just didn't sound right to you. Your views on this are an example of

A) practical intelligence.
B) confirmation bias.
C) long-term memory.
D) cognition.
E) creativity.

Question 50

Assume that you just looked in your address book to find where a friend lives. Then you walk down the street to find that address. In remembering the address while you are looking for it,you are using

A) factual knowledge memory.
B) long-term memory.
C) working memory.
D) complementary memory.
E) prototypes.

Question 51

An entrepreneur will be making a speech to business and government leaders in the community in fifteen minutes. Although this is a very important speech,the entrepreneur is calm and confident. S/he is relying on many speeches delivered successfully in the past. The success in past speeches includes remembering to address the people at the head table,when and how to advance the PowerPoint presentation slides,to repeat a question from the audience so that all can hear it,etc. The entrepreneur is relying on

A) social intelligence.
B) correct rejection.
C) procedural memory.
D) confirmation bias.
E) planning fallacy.

Question 52

Define creativity and discuss its importance,concepts,and hierarchical networks.

Question 53

Explain why a person who is more optimistic might be more likely to recognize opportunities than a person who is less optimistic.

Question 54

Assume that you are making a relatively complex decision. There is some information that you can remember fairly easily,but other information is more difficult to remember. You probably will perceive the easy to remember information as more important or accurate than the difficult to remember information. This represents the

A) optimistic bias issue.
B) availability heuristic.
C) control of illusions.
D) concept framework.
E) long-term confirmation bias.

Question 55

It usually is a positive thing if entrepreneurs build relationships with other business people,politicians,and community leaders in the markets in which they do business. The ability to build these relationships is known as

A) creative intelligence.
B) concept intelligence.
C) social intelligence.
D) long-term intelligence.
E) mental rut.

Question 56

Discuss the idea of prototypes and explain how prototypes could help or hinder creativity.

Question 57

A person visualizes certain types of cars when he hears the word "vehicle." In recalling the certain types of cars,the person is using the cognitive framework called

A) cognitive error.
B) bias.
C) non-obvious response error.
D) prototypes.
E) key point recall.

Question 58

A person came up with an idea for a new product even though she was not actively searching for it. This represents the idea of

A) shortcuts.
B) alertness.
C) social networks.
D) Kirzner analysis.
E) confluence approach.

Question 59

An entrepreneurs business is not doing well and the future does not look promising. However,since the entrepreneur has so much of his life and money invested in the business,he believes that if he invests more time and money,he can turn it around. His actions demonstrate the idea of

A) staged networks.
B) escalation of commitment.
C) creativity.
D) concepts.
E) optimistic bias.

Question 60

An entrepreneur running an ice cream store that makes and sells its own ice cream comes up with a new flavor for ice cream while thinking about the new colors and fashions of clothes coming out. This represents which of the following cognitive processes?

A) Availability bias.
B) Best way approach.
C) Factual knowledge.
D) Working memory.
E) Pattern recognition.