Name: 
 

Exam Review Entrepreneurship



True/False
Indicate whether the statement is true or false.
 

 1. 

Three ways that one could develop entrepreneurial characteristics and skills would be through education, hard work, and training.
 

 2. 

The good thing to know about becoming an entrepreneur is that, when all is said and done, everyone is entrepreneurial and just needs an opportunity.
 

 3. 

There are only three characteristics that define all entrepreneurs: being curious, being perceptive, and being imaginative.
 

 4. 

Risky investments often promise better financial rewards than safer investments.
 

 5. 

Once an entrepreneur commits to an entrepreneurial venture and assumes all of the risk involved in that venture, it is highly unlikely that the business will fail.
 

 6. 

Successful entrepreneurs minimize and manage risk.
 

 7. 

By researching potential problems, an entrepreneur takes all of the risk out of setting up a business venture.
 

 8. 

When facing a problem, the recommended approach for an entrepreneur is to do everything to avoid the problem so as to maximize the chance of being successful.
 

 9. 

Being perceptive as an entrepreneur means to visualize things that others may not necessarily see as opportunities and then acting on that perception.
 

 10. 

A curious entrepreneur is one who is motivated by the excitement of starting a new venture and does so by establishing achievement goals.
 

 11. 

Persistence is an entrepreneurial characteristic that describes a person who will not give up easily and who tries all alternatives to achieve success.
 

 12. 

The entrepreneur who is willing to work 16 hours a day, 7 days a week to succeed has an entrepreneurial characteristic called independence.
 

 13. 

The entrepreneur who believes in himself or herself and is convinced that the risk is worth the effort is very self-confident.
 

 14. 

Having a skill means that you have the ability to do something specific, which enables you to translate knowledge into action.
 

 15. 

Entrepreneurs identify what they need to know, and then immediately create a business venture with that knowledge.
 

 16. 

Knowing what questions to ask, in the process of doing research, is a very important skill to have for an entrepreneur.
 

 17. 

A new entrepreneurial business venture could have begun simply by an entrepreneur asking a series of questions in the pursuit of gathering information.
 

 18. 

Magazines, periodicals, newspapers, newsletters, and trade journals are typical general interest publications that all entrepreneurs would use to gather information.
 

 19. 

A database is an unorganized list of articles that have been published about a specific topic over a particular period of time.
 

 20. 

Free consulting services, such as business trends and local tax rates, are provided by chambers of commerce and business development offices in most cities or towns.
 

 21. 

Gathering information is critical for a new entrepreneur and being able to take advantage of free services, such as libraries, Internet, consultants and professionals, will assist in getting started.
 

 22. 

Two advantages of using the Internet would be to having a link to government websites and to accessing an endless volume of information.
 

 23. 

It is a fact that entrepreneurs acquire new knowledge as they look for ways to solve problems.
 

 24. 

Management performs four major functions: planning, organizing, directing, and controlling; whereas an entrepreneur’s management skills consist of simply planning and organizing.
 

 25. 

When entrepreneurs empower staff, they are giving their employees the feeling that their contribution to the business is important.
 

 26. 

In building good staff relationships, entrepreneurs try to get to know and empathize with their employees. By doing so, it becomes much harder to motivate the employees to do good work.
 

 27. 

“How will I make my customers feel good today?” is a good customer relationship question for all entrepreneurs.
 

 28. 

Evaluation criteria for a new venture should consist of feasibility, marketability, and profitability.
 

 29. 

When an entrepreneur is speaking about the target market for his or her venture, that person is making reference to the feasibility criterion.
 

 30. 

A feasibility chart for a proposed new venture should consist of information about financing, location, permits, suppliers, and staff.
 

 31. 

New entrepreneurs need to ask themselves two questions before starting a new venture: What kind of venture will I start? and How will I do it?
 

 32. 

Entrepreneurs can seek a venture opportunity in one of two ways: an idea-driven opportunity or a market-driven opportunity.
 

 33. 

A market-driven opportunity is one that you create as a result of an invention or innovation.
 

 34. 

When an entrepreneur relies on an idea-driven opportunity, he or she does so at the risk that there may be no demand for the product or service being developed.
 

 35. 

Once you have the idea for your venture, the next steps are simple and quite straight forward. It is just a matter of finding out who wants what you can produce and in what quantities.
 

 36. 

In a market-driven enterprise, entrepreneurs look for a customer base and then develop the goods or service to meet the needs and wants of those customers.
 

 37. 

The big advantage of a market-driven enterprise over an idea-driven enterprise is that the entrepreneur doesn’t have to waste money on doing research.
 

 38. 

Since it is not necessary for an idea person to link up with a marketing person, it follows that successful entrepreneurial ventures are either purely idea-driven or market-driven.
 

 39. 

An idea person can learn marketing and technical skills by taking courses or by reading books on any subject.
 

 40. 

If there is both an idea and a market for a product, an entrepreneur may assume that he or she has a feasible venture with the potential to succeed.
 

 41. 

A venture is feasible only when it fails to solve a problem or to satisfy a need and want of the consumer.
 

 42. 

A market segment is any part of an overall market that has common characteristics.
 

 43. 

The larger the market segmentation, the easier it is to determine what is available in a particular market.
 

 44. 

Finding a market segment for your new product is important and that is why it is critical to analyze that segment after you launch your new venture.
 

 45. 

Product mapping allows an entrepreneur to visualize all the products or services that are available in a particular market segment.
 

 46. 

Analyzing sales statistics, taste-test data, product histories, and consumer motivation data are all tasks that should be completed at the stage of development known as service mapping.
 

 47. 

Setting a venture apart from other manufacturers or distributors is something that should not be considered by a new entrepreneur because it could be a disadvantage for that business.
 

 48. 

An invention is a product or process that does something that has never been done before.
 

 49. 

By definition, an inventor is an entrepreneur who builds a business to produce, distribute, and market the invention.
 

 50. 

Inventing something may not be an entrepreneurial activity, but creating an innovation is considered to be an entrepreneurial activity.
 

 51. 

A copyright gives the holder the sole right to make, use, or sell an invention for a set period of time, preventing others from using it without permission.
 

 52. 

Licensing an invention means that the inventor allows another business to use his or her invention for a fee.
 

 53. 

A franchise agreement is an arrangement for one business to license the rights to its name and procedures to another business or person.
 

 54. 

Venture capitalists are those financial investors who are interested in forming a partnership with risk sharing entrepreneurial inventors.
 

 55. 

Once a patent or copyright has been obtained by an inventor, those rights and privileges obtained cannot be sold or given away.
 

 56. 

To innovate means to use new technology, materials, or processes to improve existing products, or how they are produced and distributed.
 

 57. 

The person who creates something from nothing is an inventor while the person who improves that product or process is known as an innovator.
 

 58. 

It is usually easier for innovators to be entrepreneurs than for inventors to be entrepreneurs.
 

 59. 

Changing the market strategy for an entrepreneur is all about altering the distribution process and taking advantage of international markets.
 

 60. 

Marketers can use innovation to gain a business advantage by changing the way a product is used, packaged, marketed, distributed, designed, or manufactured.
 

Multiple Choice
Identify the choice that best completes the statement or answers the question.
 

 1. 

The most common way to achieve financial success is by developing entrepreneurial characteristics through
A.
education
B.
gambling
C.
luck
D.
all of the above
 

 2. 

All entrepreneurs possess similar characteristics, which include
A.
risk taking
B.
being perceptive
C.
being imaginative
D.
all of the above
 

 3. 

Because there are no sure things in business, entrepreneurs often take on a high degree of
A.
flexibility
B.
risk
C.
independence
D.
persistence
 

 4. 

Entrepreneurs are often presented with opportunities and challenges, which usually come about when that entrepreneur is faced with a
A.
profit
B.
loss
C.
problem
D.
success
 

 5. 

Wanting to know how things work and exploring answers is called being
A.
perceptive
B.
imaginative
C.
a risk taker
D.
curious
 

 6. 

When an entrepreneur is being creative in thinking about solutions to problems, that person is being
A.
perceptive
B.
imaginative
C.
a risk taker
D.
curious
 

 7. 

The entrepreneur who takes the approach of never giving up until every idea has been tried is one who is practicing being
A.
persistent
B.
imaginative
C.
a risk taker
D.
curious
 

 8. 

An expression that describes those entrepreneurs who set objectives and who strive to meet and exceed those objectives is called
A.
goal setting
B.
profit making
C.
being flexible
D.
being perceptive
 

 9. 

When a person believes in themselves and persists beyond any doubts that may exist, they are exhibiting
A.
independence
B.
curiosity
C.
self-confidence
D.
perception
 

 10. 

The most common characteristic for an entrepreneur is the desire for
A.
hard work
B.
setting goals
C.
independence
D.
all of the above
 

 11. 

The entrepreneur who is good at adapting to changing trends, markets, rules, and economic conditions is one who is considered to be
A.
self-confident
B.
imaginative
C.
persistent
D.
flexible
 

 12. 

Having the ability to do something that is specific is having a(n)
A.
goal
B.
skill
C.
objective
D.
knowledge
 

 13. 

The first step in knowledge acquisition is having the ability to
A.
get an answer
B.
perform research
C.
ask a question
D.
avoid trouble
 

 14. 

When an entrepreneur uses their research skills to solve a problem or create a venture plan, it all starts with
A.
using information
B.
planning the venture plan
C.
executing the venture plan
D.
gathering information
 

 15. 

Gathering information for the venture plan could consist of sourcing
A.
libraries
B.
periodicals
C.
Internet
D.
all of the above
 

 16. 

If an entrepreneur is relying on the expertise of accountants, lawyers, and advertising executives, they are using
A.
consultants
B.
professionals
C.
databases
D.
periodicals
 

 17. 

Advantages of using the Internet when gathering information consist of one or more of the following:
A.
difficult to find information
B.
information may be out of date
C.
sharing of information
D.
information may be inaccurate
 

 18. 

Major functions performed by management include:
A.
planning
B.
organizing
C.
directing
D.
all of the above
 

 19. 

In order to achieve individual goals, entrepreneurs apply this to their personal, financial, and material resources.
A.
management objectives
B.
management skills
C.
management goals
D.
management directives
 

 20. 

When an entrepreneur is creating detailed schedules, “to do” lists, and reminder files, that person is focusing on
A.
organizing
B.
directing
C.
controlling
D.
planning
 

 21. 

This entrepreneurial skill allows entrepreneurs to use a strict budgeting process so that they will not exceed the budgets previously established.
A.
organizing
B.
directing
C.
controlling
D.
planning
 

 22. 

When entrepreneurs empower their staff, they are practicing the following management skill.
A.
organizing
B.
directing
C.
controlling
D.
planning
 

 23. 

What type of skill gives rewards according to an employee’s needs and personality?
A.
communication
B.
motivation
C.
customer relationship
D.
supplier relationship
 

 24. 

The relationship skills developed by entrepreneurs to deal with their “boss” are known as
A.
customer relationships
B.
staff relationships
C.
supplier relationships
D.
management relationships
 

 25. 

If a business had trouble meeting its financial obligations, communication with the following group would be advisable.
A.
customers
B.
staff
C.
suppliers
D.
management
 

 26. 

Which of the following categories of work has the greatest potential to make you wealthy?
A.
lawyer
B.
doctor
C.
engineer
D.
entrepreneur
 

 27. 

The venture evaluation criteria that involves projecting revenue and expenses is called
A.
feasibility
B.
marketability
C.
profitability
D.
economic ability
 

 28. 

The venture evaluation criteria in which you check out such things as licenses and permits is called
A.
feasibility
B.
marketability
C.
profitability
D.
economic ability
 

 29. 

The evaluation criteria in which an entrepreneur would concern themselves with competitors and competition would be
A.
feasibility
B.
marketability
C.
profitability
D.
economic ability
 

 30. 

The document that should be prepared by an entrepreneur to take into account all of the venture evaluation criteria is called a(n)
A.
income statement
B.
management forecast
C.
evaluation summary
D.
business plan
 

 31. 

An idea-driven enterprise is one that is created as a result of
A.
an invention
B.
an innovation
C.
either an invention or an innovation
D.
neither an invention or an innovation
 

 32. 

Having an idea for a venture is a first step, which may require an entrepreneur to do one or more of the following.
A.
get a location
B.
invest in materials and equipment
C.
hire staff
D.
all of the above
 

 33. 

The greatest worry for an entrepreneur when starting an idea-driven enterprise is that there may not be
A.
a demand for the product
B.
a supply of the product
C.
a suitable location
D.
enough raw materials
 

 34. 

A market-driven enterprise follows a sequence of events, the first one being
A.
finding a location
B.
finding a customer base
C.
finding appropriate financing
D.
finding a product to market
 

 35. 

If an entrepreneur is using a market-driven approach, the following marketing tool will be critical to determining next steps.
A.
need
B.
want
C.
research
D.
design
 

 36. 

The point at which a market-driven enterprise could fall into trouble, and may fail to succeed, is when an entrepreneur realizes that he or she is
A.
not a designer
B.
not a marketer
C.
just an inventor
D.
all of the above
 

 37. 

History has shown that the most successful entrepreneurial ventures are
A.
purely market-driven
B.
purely idea-driven
C.
a balance of market-driven and idea-driven
D.
neither market-driven nor idea-driven
 

 38. 

Partnerships, linking idea-driven and market-driven entrepreneurs, can come about through the use of the
A.
Internet
B.
newspaper
C.
trade fair
D.
all of the above
 

 39. 

If an entrepreneur has set reasonable goals, and there is both an idea and a market for a product, that venture is considered to be a
A.
capital venture
B.
feasible venture
C.
marketing venture
D.
successful venture
 

 40. 

When investigating the market for a new venture, an entrepreneur should
A.
segment the current market
B.
create a product or service map
C.
both (a) and (b)
D.
neither (a) nor (b)
 

 41. 

When dealing with market segmentation, it is easier to determine what is available in a particular market if the segmentation is
A.
large
B.
small
C.
about the same
D.
does not matter
 

 42. 

The process that allows an entrepreneur to visualize all of the products or services that are available in a particular segment is called
A.
product mapping
B.
product planning
C.
product visualization
D.
product segmenting
 

 43. 

The stage known as service mapping involves doing a lot of research, which could include gathering data from
A.
taste testing
B.
analyzing sales statistics
C.
product histories
D.
all of the above
 

 44. 

When a product or process is developed that had never been done before, it is referred to as
A.
innovation
B.
experiment
C.
invention
D.
research
 

 45. 

The question that usually kick starts the process of inventing is when someone asks
A.
What now?
B.
Where to?
C.
Where now?
D.
What if?
 

 46. 

The permission that one receives to have the exclusive right to publish or produce works of literature or art is called a(n)
A.
patent
B.
copyright
C.
invention
D.
innovation
 

 47. 

During this process, an invention is considered to be legally protected as long as products are marked
A.
copyright pending
B.
patent approved
C.
patent pending
D.
copyright approved
 

 48. 

If an inventor decides to allow another business to use his or her invention for a fee, the process of doing this is called
A.
licensing
B.
approving
C.
selling
D.
patenting
 

 49. 

Another name for a fee that can be either a fixed amount or a percentage of the total sales revenue paid to the copyright holder is called a
A.
markup
B.
license
C.
discount
D.
royalty
 

 50. 

If an inventor wishes to sell the distribution rights to another person, he or she should enter into an licensing agreement, also known as a
A.
distribution agreement
B.
franchise agreement
C.
sales agreement
D.
exclusive contract agreement
 

 51. 

Entrepreneurial inventors who wish to minimize risk usually form a partnership with a business or a financial investor also known as a
A.
sales expert
B.
venture partner
C.
marketing guru
D.
limited partner
 

 52. 

The use of new technologies, materials, or processes to improve existing products, or how they are produced or distributed, is called an
A.
invention
B.
innovation
C.
discovery
D.
all of the above
 

 53. 

If inventors sell their invention and, as a result, gives up total control, they may run the risk of
A.
losing out on future profits
B.
losing control of what happens to their idea
C.
losing control of production and distribution
D.
all of the above
 

 54. 

Which of the following sequences make the most sense
A.
inventors followed by entrepreneurs
B.
inventors followed by innovators
C.
innovators followed by entrepreneurs
D.
innovators followed by inventors
 

 55. 

An innovative way that entrepreneurs can gain a competitive business advantage includes one or more of the following
A.
packaging
B.
design
C.
manufacturing
D.
all of the above
 

 56. 

If an entrepreneur is seeking to be innovative by participating in a trade show, he or she is trying to change the
A.
distribution process
B.
marketing strategy
C.
manufacturing process
D.
way the product is used
 

 57. 

If an entrepreneur is seeking to be innovative by promoting a product, he or she is trying to change the
A.
distribution process
B.
marketing strategy
C.
manufacturing process
D.
way the product is used
 

 58. 

If an entrepreneur is seeking to be innovative by using new raw materials, he or she is trying to change the
A.
distribution process
B.
marketing strategy
C.
manufacturing process
D.
way the product is used
 

 59. 

If an entrepreneur is seeking to be innovative by finding new applications for the product, he or she is trying to change the
A.
distribution process
B.
marketing strategy
C.
manufacturing process
D.
way the product is used
 

 60. 

For those individuals who wish to become an entrepreneur, they should ask themselves one or more of the following questions.
A.
What kind of venture will I start?
B.
How will I do it?
C.
Both (a) and (b)
D.
Neither (a) nor (b)
 



 
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