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Test Bank For Effective Small Business Management, 10th Edition - Document preview page 1

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Test Bank For Effective Small Business Management, 10th Edition

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Test Bank For Effective Small Business Management, 10th Edition - Page 1 preview image1Effective Small Business Management, 10e(Scarborough)Chapter 1Entrepreneurs: The Driving Force Behind Small Business1) The nation is rapidly moving from:A) industrial to capitalism.B) capitalism to industrial.C) industrial to knowledge-based.D) None of the aboveAnswer: CPage Ref: 4Topic: IntroductionAACSB: Communication2) Which of the following corporate trends have contributed to the growth of entrepreneurship?A) The acquisition and merging of mega corporationsB) The idea that "small is beautiful" in large companies, resulting in less hierarchy and layers ofmanagementC) The flood of venture capital being made available to small businessesD) The downturn in international markets forcing a focus on the domestic marketAnswer: BPage Ref: 3Topic: IntroductionAACSB: Communication3) Entrepreneurial education:A) has become extremely popular.B) universities are not able to meet the demand.C) more courses are being offered in entrepreneurship.D) All of the aboveAnswer: DPage Ref: 16Topic: Why the Boom: The Fuel Feeding the Entrepreneurial FireAACSB: Communication4) Researchers who study entrepreneurs have discovered that:A) successful entrepreneurs start with an idea, resources, and a small management team.B) there is one key set of traits that mark a successful entrepreneur.C) entrepreneurs desire responsibility and are willing to take moderate risks.D) the most successful entrepreneurs are willing to take extreme risks and bet the farm in orderto succeed.Answer: CPage Ref: 5Topic: What is an Entrepreneur?AACSB: Multicultural and Diversity
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Test Bank For Effective Small Business Management, 10th Edition - Page 2 preview image
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Test Bank For Effective Small Business Management, 10th Edition - Page 3 preview image25) Dirk wants to be in control. He's tired of taking orders from others and wants to feel a sense ofaccountability for the outcome of his work. Dirk displays the entrepreneurial characteristic of:A) the desire for immediate feedback.B) a desire for responsibility.C) confidence in his ability to succeed.D) a high energy level.Answer: APage Ref: 6Topic: What is an Entrepreneur?AACSB: Analytic Skills6) Entrepreneurs seem to be characterized by:A) a desire for money.B) an inability to organize but strong conceptual skills.C) a desire to work alone because of weak management skills and a need for control.D) a high energy level.Answer: DPage Ref: 6Topic: What is an Entrepreneur?AACSB: Reflective Thinking7) Juan is able to work well in a constantly changing atmosphere and has little concern for whattomorrow will bring. Juan demonstrates which of the following characteristics of a typicalentrepreneur?A) The willingness to take extreme risksB) A desire for immediate feedbackC) A tolerance for ambiguityD) A future orientationAnswer: CPage Ref: 7Topic: What is an Entrepreneur?AACSB: Analytic Skills8) Entrepreneurs start businesses for a number of reasons including:A) an opportunity to make a difference.B) having to deal with less government regulation than as an executive of a large company.C) a much lower risk of career failure due to layoff or acquisition than working for a largecompany.D) the opportunity to get rich much quicker than if they work for a large company.Answer: APage Ref: 12Topic: The Benefits of Owning a Small BusinessAACSB: Reflective Thinking
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Test Bank For Effective Small Business Management, 10th Edition - Page 4 preview image39) Surveys show that owners of small businesses believe that:A) they work harder on their own than if they worked for someone else.B) they earn less than if they worked for someone else.C) they are less satisfied than if they worked for someone else.D) venture capital is relatively easy to raise.Answer: APage Ref: 13Topic: The Benefits of Owning a Small BusinessAACSB: Communication10) A significant benefit of starting your own company is:A) more leisure time because there is less of a need to punch a time clock.B) contributing to society and being recognized for your efforts.C) to be able to choose who you work with or don't work with.D) more job security than working for a large corporation.Answer: BPage Ref: 13Topic: The Benefits of Owning a Small BusinessAACSB: Communication11) Kyoto has started an interior decoration business. Everything about the business, from itsname to the color schemes used in the corporate letterhead, is an expression of her personality.She sees this business as her greatest personal achievement. Kyoto is experiencing theopportunity ________ of small business ownership.A) to reap unlimited profitsB) to contribute to societyC) to make a differenceD) to reach her full potentialAnswer: DPage Ref: 12Topic: The Benefits of Owning a Small BusinessAACSB: Analytic Skills12) Mary and Ted are discussing starting a new business and are asking themselves a series ofquestions like; "What is the worst that could happen if we fail?" "How likely is that to happen?"They are assessing which potential drawback of small business ownership?A) The long hours and hard work involvedB) The risk of losing their entire investmentC) The lower quality of life they'll experienceD) The uncertainty of their incomeAnswer: BPage Ref: 14Topic: The Potential Drawbacks of EntrepreneurshipAACSB: Analytic Skills
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Test Bank For Effective Small Business Management, 10th Edition - Page 5 preview image413) Potential drawbacks of small business ownership include:A) a relatively low guaranteed income.B) a significantly freer personal schedule but less personal income and assets with which toenjoy the more relaxed schedule.C) a high likelihood of a lower quality of life while starting and establishing the small business.D) relatively limited potential for further personal development.Answer: CPage Ref: 15Topic: The Potential Drawbacks of EntrepreneurshipAACSB: Communication14) More businesses are started by individuals between ________ than at any other age.A) under 25B) 25-34C) 35-44D) 45-54Answer: BPage Ref: 16Topic: Why the Boom: The Fuel Feeding the Entrepreneurial FireAACSB: Multicultural and Diversity15) Which of the following trends is feeding the growth of entrepreneurial activity?A) A greater focus on professional advancement combined with the "flattening" of largecorporations' management hierarchiesB) The rapid growth of the need for low-technology productsC) A favorable attitude toward entrepreneurs in American societyD) Diminished wage increases in corporations and the desire for a better standard of lingAnswer: CPage Ref: 16Topic: Why the Boom: The Fuel Feeding the Entrepreneurial FireAACSB: Reflective Thinking16) The growth of entrepreneurship is being fed by:A) the return to a manufacturing-based economy.B) technological advancements.C) diminished opportunities in overseas markets for larger corporations.D) the vilifying of large corporations in society.Answer: BPage Ref: 16Topic: Why the Boom: The Fuel Feeding the Entrepreneurial FireAACSB: Communication
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Test Bank For Effective Small Business Management, 10th Edition - Page 6 preview image517) The international market:A) has proven to be a tremendous opportunity for small business.B) is being dominated by large corporations based in Europe and Japan.C) is largely closed to small U.S.-based businesses because of the growth of internationalentrepreneurship.D) provides greater opportunities for women and minority entrepreneurs than U.S. domesticmarkets do.Answer: APage Ref: 18Topic: Why the Boom: The Fuel Feeding the Entrepreneurial FireAACSB: Multicultural and Diversity18) Companies started by women differ from companies started by men in that:A) men's start-ups tend to be smaller and less well-financed than women's.B) women's companies tend to be labor-intense businesses and therefore employ more people,even though they have smaller revenues.C) women's companies start smaller.D) men tend to start their businesses with their own capital, women with others' capital.Answer: CPage Ref: 21Topic: The Cultural Diversity of EntrepreneurshipAACSB: Multicultural and Diversity19) Minorities cite which of the following as the primary barrier to their entrepreneurship?A) skepticismB) access to capitalC) discriminationD) social pressureAnswer: CPage Ref: 21Topic: The Cultural Diversity of EntrepreneurshipAACSB: Multicultural and Diversity20) Most of today's immigrant entrepreneurs come into the U.S. with:A) significant educational and financial resources.B) few skills, little education, and no financial resources.C) few resources but lots of dedication and desire.D) little education but significant financial backing from their families in their home countries.Answer: CPage Ref: 22Topic: The Cultural Diversity of EntrepreneurshipAACSB: Multicultural and Diversity
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Test Bank For Effective Small Business Management, 10th Edition - Page 7 preview image621) Part-time entrepreneurship has an additional advantage over starting up a company full-timein that:A) it is a much lower risk for the entrepreneur.B) it doesn't require a business plan.C) the entrepreneur can change products and markets more easily.D) the entrepreneur doesn't need to know the industry as well.Answer: APage Ref: 22Topic: The Cultural Diversity of EntrepreneurshipAACSB: Communication22) Which of the following is true about home-based businesses?A) Over 2/3 of all home-based businesses are owned by minority males.B) Home-based businesses tend to focus on blue-collar, lower skill industries.C) The growth of technology has significantly slowed the growth of home-based businesses.D) The average home-based business earns over $60,000 a year.Answer: DPage Ref: 23Topic: The Cultural Diversity of EntrepreneurshipAACSB: Communication23) When building a home-based business, it is important that the entrepreneur:A) keep friends and neighbors from disturbing him/her while working at home.B) not discuss it with the family to avoid raising expectations and creating undue pressure.C) have all business mail sent to the home address.D) not take the home office deduction to avoid IRS scrutiny of his/her tax return.Answer: APage Ref: 24Topic: The Cultural Diversity of EntrepreneurshipAACSB: Communication24) When running a home-based business:A) you generally don't need a separate business line, especially during the day.B) you still need to dress for work and for client meetings.C) zoning laws do not apply.D) you can have up to six employees in your home without informing the local zoningcommission.Answer: BPage Ref: 24Topic: The Cultural Diversity of EntrepreneurshipAACSB: Communication
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Test Bank For Effective Small Business Management, 10th Edition - Page 8 preview image725) "Copreneurs" are marked by:A) a division of labor by expertise.B) their similarity to the traditional mom and pop operation.C) a decline in the number of businesses.D) a greater success at raising venture capital than sole proprietorship-type businesses.Answer: APage Ref: 25Topic: The Cultural Diversity of EntrepreneurshipAACSB: Reflective Thinking26) Successful copreneurs are marked by which of the following characteristics?A) distinct and different business and life goalsB) a clear delineation of who is the superior partner and who is the subordinate partnerC) a blending of responsibilities, roles, and authorityD) mutual respect for each other's talentsAnswer: DPage Ref: 25Topic: The Cultural Diversity of EntrepreneurshipAACSB: Communication27) A major threat that family businesses face is:A) having kids.B) divorce.C) management succession.D) None of the aboveAnswer: CPage Ref: 25Topic: The Cultural Diversity of EntrepreneurshipAACSB: Communication28) Bill and Sally havebeentired of the corporate rat race. They leave their investment bankingpositions in New York, move to Colorado and start a business raising Mohair sheep. This coupleis an example of the entrepreneurial phenomenon of:A) corporate dropouts.B) corporate downsizing.C) corporate raiders.D) corporate castoffs.Answer: DPage Ref: 26Topic: The Cultural Diversity of EntrepreneurshipAACSB: Analytic Skills
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Test Bank For Effective Small Business Management, 10th Edition - Page 9 preview image829) Small businesses thrive in every industry, but the majority of them are in the:A) general construction industry.B) retail businesses.C) mining and manufacturing.D) service industries.Answer: DPage Ref: 28Topic: The Contributions of Small Businesses, GraphAACSB: Reflective Thinking30) More businesses fail because of ________ than for any other reason.A) incompetent managementB) theft by employeesC) insufficient capitalD) poor choice of locationAnswer: APage Ref: 30Topic: Putting Failure into PerspectiveAACSB: Communication31) Tom was a financial consultant who liked to work with his hands, especially in makingfurniture. He quit his rat race financial job to start a small custom furniture business. Afterstruggling for several years, he closed it and went back to financial services. Tom discovered thatthere was a big difference between making furniture for himself and running a customer furnituremanufacturing business. Tom's business failed because of:A) uncontrolled growth.B) poor financial control.C) his lack of experience.D) an inability to access start-up capital.Answer: CPage Ref: 30Topic: Putting Failure into PerspectiveAACSB: Analytic Skills32) Entrepreneurial businesses fall victim to this circumstance because they think it only benefitslarge companies. Without it, a firm has no sustainable basis for survival.A) A lack of strategic planningB) Poor financial controlsC) Uncontrolled growthD) Lack of inventory controlAnswer: APage Ref: 33Topic: How to Avoid the PitfallsAACSB: Reflective Thinking
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Test Bank For Effective Small Business Management, 10th Edition - Page 10 preview image933) One key to success with a business startup is to begin with enough ________:A) capitalB) salesC) accounts payableD) suppliersAnswer: APage Ref: 32Topic: How to Avoid the PitfallsAACSB: Reflective Thinking34) The location of the business is especially important for what type of start-up businesses?A) ManufacturingB) ServiceC) Computer-based serviceD) RetailAnswer: DPage Ref: 30Topic: Putting Failure into PerspectiveAACSB: Communication35) A key characteristic of a successful entrepreneur is:A) never having failed.B) expert technical knowledge of the product.C) learning to fail intelligently.D) earning at least a 25% return for investors.Answer: CPage Ref: 31Topic: Putting Failure into PerspectiveAACSB: Communication36) The key ingredient-the crucial element-to avoiding the failure of a new business is:A) the business plan.B) knowing the business.C) technical expertise regarding the product.D) differentiating the business and product from the competition.Answer: APage Ref: 32Topic: How to Avoid the PitfallsAACSB: Communication
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Test Bank For Effective Small Business Management, 10th Edition - Page 11 preview image1037) The key to effective financial management in a start-up is:A) excellent controls.B) the use of ABC accounting processes.C) sufficient start-up capital.D) an adequate inventory on hand.Answer: CPage Ref: 32Topic: How to Avoid the PitfallsAACSB: Reflective Thinking38) Which of the following is true about avoiding business failure?A) You must understand financial statements.B) You need to learn how to manage others.C) You must differentiate your product from the competition.D) You must do all of these.Answer: DPage Ref: 32 and 33Topic: How to Avoid the PitfallsAACSB: Reflective Thinking39) U.S. economic structure is moving:A) away from an agricultural to an industrial economy.B) away from an industrial to a knowledge-based one.C) back to an agricultural economy.D) away from an agricultural to a knowledge-based one.Answer: BPage Ref: 4Topic: IntroductionAACSB: Communication40) A knowledge based business economy favors small business because:A) the cost of managing and transmitting knowledge is very low.B) small businesses are more successful.C) information technology is driving cost of managing and transmitting knowledge lower.D) Both A and CAnswer: DPage Ref: 4Topic: IntroductionAACSB: Communication
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Test Bank For Effective Small Business Management, 10th Edition - Page 12 preview image1141) Money driven and wild risk takers are both:A) common characteristics of entrepreneurs.B) entrepreneur's techniques to success.C) common misconceptions of entrepreneurs.D) None of the aboveAnswer: CPage Ref: 5 and 7Topic: What is an Entrepreneur?AACSB: Communication42) "Copreneurs" are:A) personality traits of entrepreneurs.B) entrepreneurial couples who work together as co-owners of their business.C) business magazines targeted towards entrepreneurs.D) None of the aboveAnswer: BPage Ref: 25Topic: The Cultural Diversity of EntrepreneurshipAACSB: Reflective Thinking43) Small businesses are those that employ:A) more than 100 employees.B) fewer than 20 employees.C) fewer than 100 employees.D) Number doesn't matter.Answer: CPage Ref: 27Topic: The Contributions of Small BusinessesAACSB: Communication44) The most important change due to Expansion occurs in:A) organizational structure.B) inventory and financial control procedures.C) managerial expertise.D) personnel assignments.Answer: CPage Ref: 30Topic: Putting Failure into PerspectiveAACSB: Communication
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Test Bank For Effective Small Business Management, 10th Edition - Page 13 preview image1245) Which of the following is not a common characteristic of entrepreneurs?A) Desire for responsibilityB) Business plan expertiseC) Preference for moderate riskD) High energy levelAnswer: BPage Ref: 5-7Topic: What is an Entrepreneur?AACSB: Communication46) Primary cause of business failure is:A) improper managerial attitude.B) poor financial controls.C) incompetent management.D) location.Answer: CPage Ref: 30Topic: Putting Failure into PerspectiveAACSB: Communication47) To avoid business failure, an entrepreneur should:A) know the business in depth.B) develop a solid business plan.C) take entrepreneurship courses.D) Both A and BAnswer: DPage Ref: 32Topic: How to Avoid the PitfallsAACSB: Communication48) Forces driving the entrepreneurial trend in our economy include which of the following?A) Technological advancementB) Shift to a service economyC) World Wide WebD) All of the aboveAnswer: DPage Ref: 16 and 17Topic: Why the Boom: The Fuel Feeding the Entrepreneurial FireAACSB: Use of IT
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Test Bank For Effective Small Business Management, 10th Edition - Page 14 preview image1349) Management Incompetence includes all but:A) the owner lacks the leadership ability necessary to operate it successfully.B) lack of capacity to make the business work.C) insufficient capital.D) inexperience.Answer: CPage Ref: 30Topic: Putting Failure into PerspectiveAACSB: Communication50) Customer service, convenience, speed and quality are all examples of:A) learning to manage people effectively.B) generating more revenue.C) small businesses.D) setting your business apart from others.Answer: DPage Ref: 33Topic: How to Avoid the PitfallsAACSB: Communication51) Drawbacks of owning a small business include all but:A) unbalanced family life.B) no guarantee that the business would make profits.C) too many financial statements.D) Both A and BAnswer: CPage Ref: 14Topic: The Potential Drawbacks of EntrepreneurshipAACSB: Communication52) Joanne is thinking about running her own business. What risks does she face?A) Getting stuck in a job she hatesB) Having to deal with more government regulation than if she were a manager in a largercompanyC) Having less status in society, as most people do not respect small business ownersD) Losing her entire invested capitalAnswer: DPage Ref: 14Topic: The Potential Drawbacks of EntrepreneurshipAACSB: Reflective Thinking
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Test Bank For Effective Small Business Management, 10th Edition - Page 15 preview image1453) The average small business owner works ________ hours per week.A) 39.5B) 54C) 40D) 80Answer: BPage Ref: 14Topic: The Potential Drawbacks of EntrepreneurshipAACSB: Reflective Thinking54) Launching and running a business can be an extremely rewarding experience, but it also can:A) be highly fun.B) bring steady paycheck.C) be stressful.D) not be rewarding at all.Answer: CPage Ref: 15Topic: The Potential Drawbacks of EntrepreneurshipAACSB: Communication55) Starting a part-time business is a popular gateway to entrepreneurship.Answer: TRUEPage Ref: 22Topic: The Cultural Diversity of EntrepreneurshipAACSB: Communication56) There has been a significant change in the U.S. economic structure, one that favors smallbusiness.Answer: TRUEPage Ref: 3Topic: IntroductionAACSB: Communication57) Entrepreneurs are people who grow existing businesses by careful management of existingresources.Answer: FALSEPage Ref: 4Topic: What is an Entrepreneur?AACSB: Communication58) Entrepreneurs are noted for their ability to bounce back after a business failure.Answer: TRUEPage Ref: 31Topic: Putting Failure into PerspectiveAACSB: Communication
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Test Bank For Effective Small Business Management, 10th Edition - Page 16 preview image1559) Typically, entrepreneurs are very good conceptually but arenotable to organize and managepeople and jobs.Answer: FALSEPage Ref: 32Topic: How to Avoid the PitfallsAACSB: Multicultural and Diversity60) One hallmark of true entrepreneurs is their ability to adapt to the changing demands of theircustomers and businesses.Answer: TRUEPage Ref: 30Topic: Putting Failure into PerspectiveAACSB: Analytic Skills61) To many entrepreneurs, the opportunity for future earnings is more important than theimmediate earning potential of the business.Answer: FALSEPage Ref: 6Topic: What is an Entrepreneur?AACSB: Communication62) Research has isolated a set of characteristics that can predict who will succeed as anentrepreneur.Answer: FALSEPage Ref: 5Topic: What is an Entrepreneur?AACSB: Communication63) Studies indicate that the opportunity to make a difference is a significant benefit in the eyesof most entrepreneurs.Answer: TRUEPage Ref: 12Topic: The Benefits of Owning a Small BusinessAACSB: Communication64) The opportunity to reap unlimited profits is the primary motivator for most entrepreneurs.Answer: FALSEPage Ref: 13Topic: The Benefits of Owning a Small BusinessAACSB: Communication65) Entrepreneurs usually experience greater income stability running their own businesses thanthey did in their corporate careers.Answer: FALSEPage Ref: 14Topic: The Potential Drawbacks of EntrepreneurshipAACSB: Communication
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