Deck 1: The Entrepreneurial Mind-Set

Question 1

As described in the Opening Profile to Chapter 1, David Reynolds knew from the day that he graduated high school, he wanted to be an entrepreneur.

Answer 1

False

Question 2

As described in the Opening Profile to Chapter 1, David Reynolds chose entrepreneurship as a career because he liked the idea of being his own boss, working in any business that he wanted to, and having unlimited earning potential.

Answer 2

True

Question 3

An interesting research finding is that individuals who study entrepreneurship are three to four times less likely to start their own business than those who study in other fields, thus indicating the value of knowing the risks involved.

Answer 3

False

Question 4

99% of businesses in Canada are in fact small or medium enterprises.

Question 5

A typical entrepreneur in the Middle Ages was the cleric, who managed the great architectural works such as abbeys and cathedrals.

Question 6

Richard Cantillon, noted 17th century economist and author, viewed the entrepreneur as a risk taker because the business owner bought (or produced) goods or services at a certain price and sold at an uncertain price, thereby operating at a risk.

Question 7

As discussed in the text, K.C. Irving is one of the best examples of the economic definition of entrepreneurship, which is an individual who organizes and operates an enterprise for personal gain.

Question 8

Modern day definitions of entrepreneurship show no connection between innovation and the act of operating a business for profit or loss.

Question 9

The key element found in all definitions of entrepreneurship is risk taking.

Question 10

As defined in the text, entrepreneurship is the process of creating something new and assuming the risks and rewards.

Question 11

A central concept of entrepreneurship is the creation of value by the customer for the entrepreneur.

Question 12

The motives of social entrepreneurship are to benefit society.

Question 13

Statistics Canada has indicated that the number-one reason entrepreneurs start their own business is money, not independence.

Question 14

As discussed in the text from an article in Profit Magazine, to be successful in the entrepreneurship game in the future, Canadians need to lower their appetite for risk and become more conservative, which will increase their chance of long-term success.

Question 15

The entrepreneurial decision process entails a movement from a present lifestyle to forming a new enterprise, a decision that typically requires a great deal of courage and energy.

Question 16

Personal disruption such as a layoff, retirement, relocation, or completion of an educational degree can be a major factor in the decision to form a new business.

Question 17

As discussed in the text, Canadian culture does not place a high value on individual opportunity or freedom, which helps to explain the low rate of company formation in Canada over the past fifty years.

Question 18

Not surprisingly, interest in entrepreneurship has been linked to independence, that is, individuals who grow up in an environment that places a high value on independence tend to be more interested in forming their own business.

Question 19

Most educational institutions are reducing their emphasis on entrepreneurship in course offerings and academic research, as these courses tend to discourage students from taking risks such as forming their own business ventures.

Question 20

A "cottage company"is a privately held business that employs fewer than 25 people and has revenues less than $10 million.

Question 21

As defined in the text, a small venture that generally employs fewer than ten people and has revenues of less than $1 million is known as a lifestyle firm.

Question 22

As described in the Opening Profile to Chapter 1, David Reynolds __________.

A) was interested in entrepreneurship from the time he left high school
B) became interested in entrepreneurship as a result of taking courses at university
C) was born into an entrepreneurial family
D) only considered entrepreneurship when he could not land a job upon graduation
E) None of the answers apply.

Question 23

As discussed in the Opening Profile to Chapter 1, as a young entrepreneur, David Reynolds was faced with which of the following problem(s)?

A) Retailers would not sign a contract without a finished product.
B) Any potential investors wanted a large equity position in the company.
C) Banks would not lend to him without signed contracts and significant collateral.
D) He was not eligible for government programs because he intended to manufacture overseas.
E) All of the answers are correct.

Question 24

As discussed in Chapter 1 of the text, what is the relationship between entrepreneurship and the studying of entrepreneurship?

A) Studying entrepreneurship has the effect of scaring students away from starting their own business.
B) Studying entrepreneurship increases the likelihood of a student starting their own business.
C) Students who start their own business later take courses in the subject to learn about more about what they are already doing.
D) There is no relationship between the study of entrepreneurship and likelihood of starting a new business.
E) Not enough research has been done in this area to draw any conclusions

Question 25

The term "entrepreneur,"literally translated, means __________.

A) risk taker
B) between-taker or go-between
C) venture capitalist
D) entrance maker
E) None of the answers apply.

Question 26

The notion of risk-taking came to be associated with entrepreneurship __________.

A) in the development of business during the 17th century
B) when merchant-adventurers explored the world to establish new trade routes
C) in the large construction projects of the Middle Ages
D) during the industrial revolution of the 18th century
E) All of the answers are correct.

Question 27

As discussed in the text, __________ developed early theories of entrepreneurship and is regarded by some as the founder of the term entrepreneur.

A) Marco Polo.
B) Peter Drucker.
C) Richard Cantillon.
D) John Law.
E) None of the answers apply.

Question 28

Richard Cantillon, a noted economist and author in the 1700's viewed the entrepreneur as a risk taker for which of the following reason(s)?

A) Entrepreneurs bought goods at an uncertain price and sold them at a certain price.
B) Entrepreneurs typically did not assume ownership of the goods that they sold.
C) Entrepreneurs bought goods at a certain price and sold them at an uncertain price.
D) Entrepreneurs who failed to make a profit were punished by law.
E) None of the answers apply.

Question 29

The 18th century entrepreneur who invented the cotton gin was __________.

A) Eli Whitney
B) Thomas Edison
C) John Law
D) Andrew Carnegie
E) None of the answers apply.

Question 30

As inventors and entrepreneurs in the 18th century, both Eli Whitney and Thomas Edison were__________ as opposed to __________.

A) venture capitalists; merchant retailers
B) capital providers; capital users
C) merchant retailers; venture capitalists
D) capital users; capital providers
E) None of the answers apply.

Question 31

The economic perspective of entrepreneurship in the late 19th and early 20th century included which of the following characteristic(s)?

A) The entrepreneur organizes and operates an enterprise for personal gain.
B) The entrepreneur pays for services she (he) employs and for the capital she (he) requires.
C) The entrepreneur contributes his (her) own initiative, skill, and ingenuity in planning, organizing, and administering the enterprise.
D) The entrepreneur assumes the chance of loss or gain consequent to unforeseen and uncontrollable circumstances.
E) All of the answers are correct.

Question 32

As discussed in the text, the late K.C. Irving was a good example of __________.

A) an entrepreneur as a venture capitalist
B) a life-style entrepreneur
C) an entrepreneur as a highly creative inventor of new ideas
D) an entrepreneur as a technological innovator and risk-taker
E) None of the answers apply.

Question 33

The difference between the late-19th century and mid-20th century definitions of entrepreneurship focuses on which of the following?

A) Innovation is an integral part of entrepreneurship.
B) Risk taking is not an absolute requirement of entrepreneurship.
C) Creativity is necessary for entrepreneurship to occur.
D) Administrative skills are necessary to entrepreneurship.
E) None of the answers apply.

Question 34

Which of the following is not an element of the entrepreneurial definition?

A) initiative taking
B) capital provider, not capital user
C) organizing and reorganizing of social and economic mechanisms to turn resources and situations to practical account.
D) the acceptance of risk or failure

Question 35

Most modern day definitions of entrepreneurship include which of the following?

A) initiative taking
B) organizing of social/economic mechanisms to turn resources and situations to practical account
C) acceptance of risk or failure
D) All of the answers are correct.
E) None of the answers apply.

Question 36

When defining entrepreneurship, economists focus on __________.

A) the use of resources, labour, materials, and other assets to create greater value
B) the assumption of risk
C) the provision of capital
D) the transformation of outputs
E) None of the answers apply.

Question 37

When defining entrepreneurship, psychologists focus on __________.

A) the use of resources, labour, materials, and other assets to create greater value
B) the entrepreneur's need to obtain something, to experiment, to accomplish, or to escape the authority of others
C) the assumption of risk
D) the provision of capital
E) None of the answers apply.

Question 38

As stated in the text, entrepreneurship is the dynamic process of __________.

A) converting debt to equity
B) employing assets beyond their present value
C) creating incremental wealth
D) resource allocation within environmental constraints
E) None of the answers apply.

Question 39

Which of the following risks do entrepreneurs take?

A) financial risks
B) psychological risks
C) social risks
D) All of the answers are correct.

Question 40

As defined in the text, __________ is the process of creating something new with value by devoting the necessary time and effort, assuming the accompanying financial, psychic, and social risks, and receiving the resulting rewards of monetary and personal satisfaction and independence.

A) stewardship
B) entrepreneurship
C) small business management
D) intrapreneurship
E) None of the answers apply.

Question 41

The potential reward(s) of entrepreneurship include which of the following?

A) monetary rewards
B) independence
C) personal satisfaction
D) All of the answers are correct.
E) None of the answers apply.

Question 42

As discussed in the text, the failure rate among entrepreneurs is __________.

A) high
B) medium
C) low
D) not possible to estimate

Question 43

The high failure rate of new enterprises can be due to which of the following?

A) poor sales
B) intense competition
C) lack of capital
D) lack of managerial ability
E) All of the answers are correct.

Question 44

Craig Dobson, founder of CHC Helicopter Ltd, is used in the text as an example of __________.

A) an entrepreneur who prefers to create new ventures rather than manage them
B) a venture capitalist who provides the capital for new enterprises
C) an entrepreneur who prefers to manage the new ventures that others create for him
D) a broker who acts as a go-between between venture capitalists and entrepreneurs
E) None of the answers apply.

Question 45

In an article on entrepreneurship in Canada from Profit magazine, Leonard Brody stated that the high rate of entrepreneurship in Canada was due to which of the following factor(s)?

A) Canada has an innovation fabric.
B) Canadians have a reputation for being reliable and trustworthy.
C) Canadians take a long-term viewpoint.
D) All of the answers are correct.
E) None of the answers apply.

Question 46

In an article on entrepreneurship in Canada from Profit magazine, Leonard Brody suggested that entrepreneurs in Canada need to improve on which of the following factor(s)?

A) Canadians need to overcome their natural aversion to risk.
B) Canadians need to work on their marketing skills.
C) Canadians need to become more venturesome and not settling for being "middle of the pack."
D) All of the answers are correct.
E) None of the answers apply.

Question 47

The terms entrepreneur and small business management have been used interchangeably over the past 25 years, but it is important to note that the two terms

A) Are defined quite differently
B) Refer to similar practices
C) Are defined similarly
D) Are irrelevant
E) Change according to the economic climate

Question 48

Managerial vs Entrepreneurial decision making: An entrepreneur is used to having ___________ at periodic intervals.

A) Strategic Orientation
B) Commitment of Resources
C) Control of Resources
D) Commitment to Opportunity
E) disruption and economic climate

Question 49

Managerial vs Entrepreneurial decision making: An entrepreneur, true to their desire for independence, employs a

A) Strategic Orientation with informal networks throughout
B) Commitment of Resources with formal networks throughout
C) flat organizational structure with informal networks throughout
D) hierarchical organizational structure with formal networks throughout
E) hierarchical organizational structure with informal networks throughout

Question 50

In the entrepreneurial decision process, the decision to make a change from one's present lifestyle is usually based on which of the following?

A) work environment
B) disruption
C) economic climate
D) work environment and disruption
E) disruption and economic climate

Question 51

As discussed in the text, individuals in marketing become interested in entrepreneurship due to which of the following?

A) They have greater access to sources of capital that other functions.
B) They are familiar with the market and customers' unfilled wants and needs.
C) They are involved in the development of new product ideas and processes.
D) Marketing people tend to be less risk averse than those in other functions.
E) None of the answers apply.

Question 52

Which of the following negative forces can provide the incentive to create a new venture?

A) Knowledge of the market place and its needs
B) Personal dislocation or disruption
C) Discovery of new technologies or processes
D) Development of new product ideas
E) Availability of capital

Question 53

New venture formation is more likely in countries in which __________.

A) making money is not highly valued
B) failure is viewed as a disgrace
C) a high value is placed on being one's own boss.
D) taking risks is considered to be foolhardy
E) All of the answers are correct.

Question 54

Known pockets of entrepreneurial subculture in Canada exist in which of the following?

A) Ottawa River Valley
B) Toronto
C) Calgary
D) Halifax
E) All of the answers are correct.

Question 55

Which of the following is a little-known pocket of entrepreneurial sub-culture in Canada, as discussed in the text?

A) Toronto
B) Vancouver
C) Calgary
D) Ottawa River Valley
E) None of the answers apply.

Question 56

Studies in a number of industries have shown that a very high percentage of the founders of companies had __________.

A) not taken courses in entrepreneurship at college or university
B) fathers and/or mothers who valued independence
C) initially been discouraged from forming their own companies by family and teachers
D) diagnosed personality disorders such as attention deficit or hyperactivity
E) None of the answers apply.

Question 57

The roads, economic stability, communication, and transportation systems fostered by the government are all examples of __________, which help and support new venture formation.

A) government agencies
B) public utilities
C) technological ingenuity
D) the infrastructure
E) None of the answers apply.

Question 58

A country's infrastructure which helps to support new venture formation includes which of the following?

A) road and transportation systems
B) communications systems
C) utilities
D) economic stability
E) All of the answers are correct.

Question 59

Which of the following is not one of the factors that support new venture formation, as discussed in the text?

A) infrastructure
B) financial resources
C) educational systems
D) repressive tax rates
E) understanding of marketing

Question 60

As stated in the text, a new company is more easily formed when __________.

A) government-sponsored programs are in place
B) the driving force is from market demand
C) risk capital availability is low
D) the driving force is from technology push
E) None of the answers apply.

Question 61

Servomax coffee company founder Arie Koifman decided that

A) technology push was the best focus
B) market demand was less important than expansion
C) The market demanded superior products
D) market surplus was not important
E) Espresso machines are on the way out.

Question 62

As defined in the text, a small venture that generally employs fewer than ten people and has revenues of less than $1 million is known as a __________.

A) lifestyle firm
B) cottage company
C) foundation company
D) high-potential venture
E) gazelle

Question 63

As defined in the text, a lifestyle firm typically __________.

A) is fast growing
B) exists primarily to support the owners
C) has great opportunity for significant growth
D) makes research and development a top priority
E) None of the answers apply.

Question 64

As defined in the text, a small venture that supports the owners and usually does not grow is known as a__________.

A) cottage company
B) lifestyle firm
C) foundation company
D) high-potential venture
E) gazelle

Question 65

As defined in the text, a foundation company __________.

A) lays the foundation for a new industry through its findings in research and development
B) may grow up to 30 or 40 employees in size
C) has little opportunity for growth and expansion
D) usually goes public
E) All of the answers are correct.

Question 66

As described in the text, a high-potential venture __________.

A) has the same growth potential as a life-style firm
B) starts out like a life-style firm
C) draws the interest of private investors only
D) frequently goes public
E) All of the answers are correct.

Question 67

Another term for a __________ is a gazelle.

A) lifestyle firm
B) foundation company
C) technology transfer from government R&D
D) high-potential venture
E) None of the answers apply.

Question 68

In Canada, small and medium businesses

A) Employ less people than big business
B) Create more jobs than big business
C) Generate less innovation than big business
D) All of the above
E) None of the answers apply.

Question 69

As discussed in the text, there exists a common perception that.

A) Entrepreneurs are less educated than the general population
B) Entrepreneurs are more educated than the general population
C) Entrepreneurs think education is not relevant
D) Entrepreneurial education is not available at colleges
E) Entrepreneurial education is only available at universities.

Question 70

Which of the following are the most frequently researched personality traits of entrepreneurs

A) Need for achievement
B) Focus of control
C) Risk taking
D) Gender identity
E) All of the answers are correct.

Question 71

Intrapreneurship is entrepreneurship

A) matching the technology with the appropriate market and making the needed adjustments
B) Within an existing business structure
C) External to a business structure
D) finding the right partners to work with
E) None of the answers apply.

Question 72

New business venturing refers to

A) matching the technology with the appropriate market and making the needed adjustments
B) The creation of business within an existing organization
C) External to a business structure
D) finding the right partners to work with
E) None of the answers apply.

Question 73

Comparison of entrepreneurs, intrapreneurs and traditional managers: failures; traditional managers

A) Deal with mistakes
B) Try to avoid mistakes
C) Attempt to hide risky projects
D) Face mistakes before hiding them
E) None of the answers apply.

Question 74

As defined in the text, __________ is entrepreneurship within an existing organization.

A) iterative synthesis
B) venture capitalism
C) intrapreneurship
D) technology transfer
E) None of the answers apply.

Question 75

Organizations will often use __________ to foster creativity and facilitate the commercialization of new innovations.

A) intrapreneurship
B) entrepreneurship
C) extrapreneurship
D) iterative synthesis
E) None of the answers apply.

Question 76

Factor(s) which can inhibit creativity and the commercialization of new innovations within a corporation include which of the following?

A) bureaucratic structure
B) emphasis on short-term profits
C) highly structured organization
D) All of the answers are correct.
E) None of the answers apply.

Question 77

As discussed in the text, the most effective method for bridging the gap between science and the marketplace, creating new enterprises, and bringing new products and services to the market is__________.

A) intrapreneurship
B) extrapreneurship
C) entrepreneurship
D) government-sponsored research
E) iterative synthesis

Question 78

Which of the following is not a factor that helps to explain the increased interest in entrepreneurial careers and education, as discussed in the text?

A) recognition of the important role of small firms in job creation and innovation
B) increase in media coverage of entrepreneurs
C) shortage of entrepreneurs and small cottage companies in the marketplace
D) view that most large organizational structures do not provide an environment for self-actualization
E) shift in employment and the number of dual-career families

Question 79

Studies have shown that entrepreneurs tend to be __________ than the general population.

A) better educated
B) less active
C) more optimistic
D) less educated
E) more ethical

Question 80

Research on the childhood family environment of the entrepreneur has shown which of the following results?

A) Entrepreneurs tend to have self-employed fathers and/or entrepreneurial mothers.
B) Experiencing failure early in life tends to discourage interest in entrepreneurship.
C) Experiencing success early in life tends to increase interest in entrepreneurship.
D) There is no relationship between failure early in life and later interest in entrepreneurship.
E) None of the answers apply.