Question 1

According to the Global Entrepreneurship Monitor (GEM) 2007 study, the majority of people in high-income countries are drawn to entrepreneurship:

Accepted Answer

A)  to take advantage of an attractive opportunity 
B)  due to lack of career prospects 
C)  as a result of government incentives 
D)  because an important role model was an entrepreneur 
E)  to gain prestige

Question 2

According to Chapter 1, a sentiment that venture capitalists often express is that:

Accepted Answer

A)  the strength of the entrepreneur and the strength of the business idea are of equal importance 
B)  they would never fund a strong entrepreneur with a weak business idea 
C)  they would rather fund a strong entrepreneur with a mediocre business idea than fund a strong business idea with a mediocre entrepreneur 
D)  a new venture's marketing plan is more important than either the strength of the entrepreneur or the strength of the business idea 
E)  they would rather fund a strong business idea with a mediocre entrepreneur than fund a strong entrepreneur with a mediocre business idea

Question 3

The entrepreneurial process consists of four steps: deciding to become an entrepreneur, developing successful business ideas, moving from an idea to an entrepreneurial firm, and divesting or selling the entrepreneurial firm.

Accepted Answer

A) True 
 B)False

Question 4

The three primary reasons that people become entrepreneurs and start their own firms are to:

Accepted Answer

A)  gain prestige, realize financial rewards, and eliminate risk in their lives 
B)  do what they were "born" to do, be their own boss, and gain prestige 
C)  take big risks, be their own boss, and do what they were "born" to do 
D)  be their own boss, pursue their own ideas, and realize financial rewards 
E)  take advantage of government subsidies, pursue their own ideas, and realize financial rewards

Question 5

The What Went Wrong? feature in Chapter 1 focuses on YouCaster, a company that was launched in 2006 but eventually went out of business. According to the feature, YouCaster failed for two primary reasons:

Accepted Answer

A)  a poorly equipped team of entrepreneurs and a lack of passion 
B)  too few customers and a lack of intellectual property protection 
C)  a lack of resolve and poor execution intelligence 
D)  a lack of execution intelligence and a poor product/customer focus 
E)  a lack of passion and too few customers

Question 6

Tahoe Trips & Trails, a company mentioned in Chapter 1, leads multiday outdoor adventure trips for private groups and corporate clients to Lake Tahoe, Yosemite, Death Valley, and similar locations. The company was started by Hanna Sullivan, an individual that gave up a prestigious job with a private investment company because Tahoe Trips & Trails better accommodates her personal lifestyle. Tahoe Trips & Trails is an example of a(n) ________ firm.

Accepted Answer

A)  entrepreneurial 
B)  salary-substitute 
C)  standard-of-living 
D)  statutory 
E)  lifestyle

Question 7

Which of the following is not one of the five common myths about entrepreneurs?

Accepted Answer

A)  Entrepreneurs are tenacious. 
B)  Entrepreneurs are moderate risk takers. 
C)  Entrepreneurs should be young and energetic. 
D)  Entrepreneurs love the spotlight. 
E)  Entrepreneurs are born not made.

Question 8

According to Chapter 1, investors often cite the ________ as their most important criterion in the decision to fund new ventures.

Accepted Answer

A)  financial position of the new venture 
B)  strength of the industry the new firm is entering 
C)  strength of the new venture's marketing plan 
D)  strength of the business idea 
E)  strength of the entrepreneur

Question 9

Entrepreneurial firms:

Accepted Answer

A)  are small firms that yield a level of income for their owner or owners that is similar to what they would earn when working for an employer 
B)  bring to market new products and services that are not particularly innovative 
C)  offer to customers common products that are not particularly innovative, and provide their owner or owners the opportunity to pursue a particular lifestyle and earn a living while doing so 
D)  provide their owner or owners the opportunity to pursue a particular lifestyle and earn a living while doing so 
E)  bring new products and services to market by creating and seizing opportunities

Question 10

As new products that are better than the existing generation of products are introduced, sales normally increase because the new products provide consumers increased value or worth. This process, which is called ________, stimulates economic activity, which is a good thing for the economy.

Accepted Answer

A)  creative destruction 
B)  repetitive destruction 
C)  iterative replacement 
D)  inventive replacement 
E)  iterative destruction

Question 11

Established firms with an entrepreneurial emphasis are proactive, innovative, and risk-taking.

Accepted Answer

A) True 
 B)False

Question 12

The number one reason that people become entrepreneurs is to be their own boss.

Accepted Answer

A) True 
 B)False

Question 13

A(n) ________ is a written document that describes all the aspects of a business venture in a concise manner.

Accepted Answer

A)  business plan 
B)  business model 
C)  operations plan 
D)  corporate plan 
E)  contingency plan

Question 14

A firm's ________ is a plan for how it competes, uses its resources, structures its relationships, interfaces with customers, and creates value to sustain itself on the basis of the value it creates.

Accepted Answer

A)  business plan 
B)  business model 
C)  tactical model 
D)  strategic plan 
E)  operations model

Question 15

Which of the following was not a contributing factor to GiftZip's early success?

Accepted Answer

A)  It was becoming increasingly affordable to launch an online business. 
B)  positive PR 
C)  angel investor funding 
D)  People were becoming increasingly comfortable buying online. 
E)  The gift card market was growing.

Exam 1: Introduction to Entrepreneurship

According to the Global Entrepreneurship Monitor (GEM) 2007 study, the majority of people in high-income countries are drawn to entrepreneurship:

According to Chapter 1, a sentiment that venture capitalists often express is that:

The entrepreneurial process consists of four steps: deciding to become an entrepreneur, developing successful business ideas, moving from an idea to an entrepreneurial firm, and divesting or selling the entrepreneurial firm.

The three primary reasons that people become entrepreneurs and start their own firms are to:

The What Went Wrong? feature in Chapter 1 focuses on YouCaster, a company that was launched in 2006 but eventually went out of business. According to the feature, YouCaster failed for two primary reasons:

Which of the following is not one of the five common myths about entrepreneurs?

According to Chapter 1, investors often cite the ________ as their most important criterion in the decision to fund new ventures.

Entrepreneurial firms:

As new products that are better than the existing generation of products are introduced, sales normally increase because the new products provide consumers increased value or worth. This process, which is called ________, stimulates economic activity, which is a good thing for the economy.

Established firms with an entrepreneurial emphasis are proactive, innovative, and risk-taking.

The number one reason that people become entrepreneurs is to be their own boss.

A(n) ________ is a written document that describes all the aspects of a business venture in a concise manner.

A firm's ________ is a plan for how it competes, uses its resources, structures its relationships, interfaces with customers, and creates value to sustain itself on the basis of the value it creates.

Which of the following was not a contributing factor to GiftZip's early success?