Test Bank for Entrepreneurship: Successfully Launching New Ventures, 6th Edition

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EntrepreneurshipSixth EditionBruce R. BarringerDuane IrelandTest Bank (Download only) forEntrepreneurship: SuccessfullyLaunching New VenturesRam Subramanian

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1Entrepreneurship: Successfully Launching New Ventures, 6e(Barringer/Ireland)Chapter 1Introduction to Entrepreneurship1) One of the businesses owned by Kirsten Blowers, the entrepreneur profiled in the openingfeature of Chapter 1, is Riffraff. Riffraff sells ________.A) refurbished furnitureB) clothingC) jewelryD) booksE) t-shirtsAnswer: ADiff: 1LO: 1.1: Describe entrepreneurship, corporate entrepreneurship, and the characteristics ofentrepreneurial firms.AACSB: Reflective ThinkingQuest. Category: Critical Thinking2) Which of the following is an accurate characterization of interest in entrepreneurship?A) There is minimal interest in entrepreneurship across the world.B) There is minimal interest in entrepreneurship in North America and Europe, but significantinterest in Asia and Australia.C) There is significant interest in entrepreneurship in North America and Europe, but minimalinterest in Asia and Australia.D) While interest in entrepreneurship was once high, it is waning in popularity across the world.E) There is tremendous interest in entrepreneurship across the world.Answer: EDiff: 1LO: 1.1: Describe entrepreneurship, corporate entrepreneurship, and the characteristics ofentrepreneurial firms.AACSB: Application of KnowledgeQuest. Category: Application3) According to the Global Entrepreneurship Monitor (GEM) 2015-2016 survey, about________ percent of adults in the United States are either starting a business or are running abusiness that has been in existence for less than 3 1/2 years.A) 3.8B) 5.5C) 7.6D) 9.0E) 11.9Answer: EDiff: 3LO: 1.1: Describe entrepreneurship, corporate entrepreneurship, and the characteristics ofentrepreneurial firms.AACSB: Application of KnowledgeQuest. Category: Application

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24) According to the Global Entrepreneurship Monitor (GEM) 2015-2016 study, the majority ofpeople in high-income countries are drawn to entrepreneurship ________.A) to take advantage of an attractive opportunityB) due to lack of career prospectsC) as a result of government incentivesD) because an important role model was an entrepreneurE) to gain prestigeAnswer: ADiff: 2LO: 1.1: Describe entrepreneurship, corporate entrepreneurship, and the characteristics ofentrepreneurial firms.AACSB: Reflective ThinkingQuest. Category: Critical Thinking5) Which of the following statements regarding survival rates of entrepreneurial firms in theUnited States is correct?A) As high as 50 percent after four yearsB) As high as 60 percent after four yearsC) As high as 70 percent after four yearsD) As high as 80 percent after four yearsE) As high as 90 percent after four yearsAnswer: ADiff: 2LO: 1.1: Describe entrepreneurship, corporate entrepreneurship, and the characteristics ofentrepreneurial firms.AACSB: Reflective ThinkingQuest. Category: Critical Thinking6) Cody Rodgers is the founder of a company named Extreme Sports Apparel. The companymakes apparel products for extreme sports enthusiasts such as rock climbers, triathletes,skateboarders, and BMX bikers. Cody wants his company to pursue a high level of corporateentrepreneurship. To achieve that goal, Cody's firm should be ________.A) innovative, risk averse, and take a "wait and see" postureB) taking a "wait and see" posture, innovative, and risk takingC) proactive, not innovative, and risk takingD) taking a "wait and see" posture, not innovative, and risk averseE) proactive, innovative, and risk takingAnswer: EDiff: 2LO: 1.1: Describe entrepreneurship, corporate entrepreneurship, and the characteristics ofentrepreneurial firms.AACSB: Analytical ThinkingQuest. Category: Analytical

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37) Google is a firm that is proactive, innovative and risk-taking. From this description, we canmost accurately conclude that Google has a high level of ________.A) enterprise focusB) innovative intensityC) entrepreneurial intensityD) creative intensityE) innovative concentrationAnswer: CDiff: 2LO: 1.1: Describe entrepreneurship, corporate entrepreneurship, and the characteristics ofentrepreneurial firms.AACSB: Reflective ThinkingQuest. Category: Critical Thinking8) Apple is an established firm that encourages and emphasizes entrepreneurial behaviorthroughout its various divisions. According to the textbook, Apple practices ________entrepreneurship.A) tacticalB) corporateC) strategicD) businessE) enterpriseAnswer: BDiff: 2LO: 1.1: Describe entrepreneurship, corporate entrepreneurship, and the characteristics ofentrepreneurial firms.AACSB: Reflective ThinkingQuest. Category: Critical Thinking9) According to the opening feature on Kirsten Blowers, Riffraff's early success was adverselyaffected by the actions of Pinterest.Answer: TRUEDiff: 1LO: 1.1: Describe entrepreneurship, corporate entrepreneurship, and the characteristics ofentrepreneurial firms.AACSB: Reflective ThinkingQuest. Category: Critical Thinking10) According to the results of the GEM 2015-2016 survey, about 1 out of every 8 and a ½American adults is actively engaged in starting a business or is the owner/manager of a businessthat is less than 3 ½ years old.Answer: TRUEDiff: 2LO: 1.1: Describe entrepreneurship, corporate entrepreneurship, and the characteristics ofentrepreneurial firms.AACSB: Application of KnowledgeQuest. Category: Application

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411) According to reliable statistics, 9 out of 10 businesses fail in their first few years ofexistence.Answer: FALSEDiff: 2LO: 1.1: Describe entrepreneurship, corporate entrepreneurship, and the characteristics ofentrepreneurial firms.AACSB: Reflective ThinkingQuest. Category: Critical Thinking12) Entrepreneurship is the process by which individuals pursue opportunities within theconstraints of the resources they control.Answer: FALSEDiff: 1LO: 1.1: Describe entrepreneurship, corporate entrepreneurship, and the characteristics ofentrepreneurial firms.AACSB: Reflective ThinkingQuest. Category: Critical Thinking13) Established firms with an entrepreneurial emphasis are proactive, innovative, and risk-taking.Answer: TRUEDiff: 2LO: 1.1: Describe entrepreneurship, corporate entrepreneurship, and the characteristics ofentrepreneurial firms.AACSB: Analytical ThinkingQuest. Category: Analytical14) What is entrepreneurship? What is the essence of entrepreneurial behavior?Answer: Entrepreneurship is the process by which individuals pursue opportunities withoutregard to the resources they currently control for the purpose of exploiting future goods andservices. The essence of entrepreneurial behavior is identifying opportunities and putting usefulideas into practice.Diff: 1LO: 1.1: Describe entrepreneurship, corporate entrepreneurship, and the characteristics ofentrepreneurial firms.AACSB: Reflective ThinkingQuest. Category: Critical Thinking

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515) Describe the three primary reasons that people become entrepreneurs and start their ownfirms.Answer: The three primary reasons that people become entrepreneurs and start their own firmsare to (1) be their own boss, (2) pursue their own ideas, and (3) pursue financial rewards.The first of these reasons-being one's own boss-is given most commonly. Many entrepreneurswant to be their own boss because either they have had a long-time ambition to own their ownfirm or they have become frustrated working in traditional jobs. The second reason people starttheir own firms is to pursue their own ideas. Some people are naturally alert, and when theyrecognize ideas for new products or services, they have a desire to see those ideas realized. Thethird reason people start their own firms is to pursue financial rewards. This motivation,however, is typically secondary to the first two.Diff: 2LO: 1.1: Describe entrepreneurship, corporate entrepreneurship, and the characteristics ofentrepreneurial firms.AACSB: Reflective ThinkingQuest. Category: Critical Thinking16) The three primary reasons that people become entrepreneurs and start their own firms are to________.A) gain prestige, realize financial rewards, and eliminate risk in their livesB) do what they were "born" to do, be their own boss, and gain prestigeC) take big risks, be their own boss, and do what they were "born" to doD) be their own boss, pursue their own ideas, and pursue financial rewardsE) take advantage of government subsidies, pursue their own ideas, and realize financial rewardsAnswer: DDiff: 2LO: 1.2: Discuss three main reasons people decide to become entrepreneurs.AACSB: Reflective ThinkingQuest. Category: Critical Thinking17) According to the textbook, the number one reason that people become entrepreneurs is to________.A) realize financial rewardsB) gain prestigeC) be their own bossD) continue a family traditionE) pursue their own ideasAnswer: CDiff: 1LO: 1.2: Discuss three main reasons people decide to become entrepreneurs.AACSB: Reflective ThinkingQuest. Category: Critical Thinking

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618) Kasey Stevenson is starting a firm in the women's clothing industry primarily to pursuefinancial rewards. According to the textbook, starting a business to make a lot of money________.A) often fails to live up to its hypeB) is equally as satisfying as other reasons for starting a businessC) is the number one reason people start their own businessD) is the number two reason that people start their own business, right behind the lack of bettercareer prospectsE) does not rank among the top three reasons that people start their own businessAnswer: ADiff: 2LO: 1.2: Discuss three main reasons people decide to become entrepreneurs.AACSB: Reflective ThinkingQuest. Category: Critical Thinking19) The number one reason that people become entrepreneurs is to pursue financial rewards.Answer: FALSEDiff: 2LO: 1.2: Discuss three main reasons people decide to become entrepreneurs.AACSB: Reflective ThinkingQuest. Category: Critical Thinking20) According to the textbook, the four characteristics of successful entrepreneurs are ________.A) passion for the business, on the cutting edge of technological change, very charismatic, andtenacity despite failureB) young and energetic, passion for the business, product/customer focus, and seeks recognitionC) passion for the business, tenacity despite failure, product/customer focus, and executionintelligenceD) on the cutting edge of technological change, forward thinking, tenacity despite failure, andproduct/customer focusE) passion for the business, seeks recognition, young and energetic, and execution intelligenceAnswer: CDiff: 2LO: 1.3: Identify four main characteristics of successful entrepreneurs.AACSB: Reflective ThinkingQuest. Category: Critical Thinking

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721) The number one characteristic shared by successful entrepreneurs is ________.A) a desire to achieve financial rewardsB) a passion for the businessC) a desire to employ other peopleD) a desire to fulfill a lifetime dreamE) a desire to bring a revolutionary new product or service to marketAnswer: BDiff: 2LO: 1.3: Identify four main characteristics of successful entrepreneurs.AACSB: Reflective ThinkingQuest. Category: Critical Thinking22) According to the textbook, the passion that motivates people to launch entrepreneurial firmstypically stems from the entrepreneur's belief that the business will ________.A) positively influence people's livesB) make a lot of moneyC) increase his or her prestigeD) lead to a high-level job in the corporate sectorE) provide for a secure retirementAnswer: ADiff: 2LO: 1.3: Identify four main characteristics of successful entrepreneurs.AACSB: Reflective ThinkingQuest. Category: Critical Thinking23) Which of the following wasNOTidentified in the textbook as one of the five primaryreasons passion is important for the launch of a successful entrepreneurial organization?A) The ability to stick to a plan even when faced with evidence that changes are neededB) A willingness to work hard for an extended period of timeC) The ability to overcome setbacks and "no's"D) The ability to listen to feedback on the limitations of your organization and yourselfE) Perseverance and persistence when the going gets toughAnswer: ADiff: 3LO: 1.3: Identify four main characteristics of successful entrepreneurs.AACSB: Analytical ThinkingQuest. Category: Analytical

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824) The What Went Wrong? feature in Chapter 1 focuses on Prim, a failed startup in the laundryindustry. According to the feature, Prim failed largely as a result of ________.A) lack of product/customer focusB) poor intellectual property protectionC) the individuals who started the firm were too young and inexperiencedD) poor execution intelligenceE) a lack of passion and resolveAnswer: EDiff: 2LO: 1.3: Identify four main characteristics of successful entrepreneurs.AACSB: Reflective ThinkingQuest. Category: Critical Thinking25) Stacey Wills, who is at heart a craftsperson, recently started a firm to manufacture a newinnovative food blender. Stacey's desire is to sell her food blender to as many people as possiblebecause she firmly believes in the merits of her product. Stacey's story best illustrates which ofthe following characteristics, or attributes, of a successful entrepreneur?A) Product/customer focusB) Execution intelligenceC) Tenacity despite failureD) A desire to please consumersE) A desire to gain financial rewardsAnswer: ADiff: 1LO: 1.3: Identify four main characteristics of successful entrepreneurs.AACSB: Analytical ThinkingQuest. Category: Analytical26) Alex and Patty Webb launched a firm several years ago and have been particularlysuccessful in introducing new products to the marketplace. One thing that Alex and Patty areparticularly good at is translating their thoughts, creativity, and imaginations into products thatreach the marketplace. The ability to make this happen is most closely related to which of thefollowing characteristics of successful entrepreneurs?A) A passion for the businessB) Execution intelligenceC) Tenacity despite failureD) Product/market focusE) A desire for recognitionAnswer: BDiff: 2LO: 1.3: Identify four main characteristics of successful entrepreneurs.AACSB: Reflective ThinkingQuest. Category: Critical Thinking

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927) The Savvy Entrepreneurial Firm feature in Chapter 1 focuses on incubators and accelerators,those that help start-ups. ________ are organizations that offer a small amount of seed funding inexchange for small equity positions in the companies that participate in their programs.A) IncubatorsB) IntrapreneursC) AcceleratorsD) Capital marketsE) BanksAnswer: CDiff: 3LO: 1.3: Identify four main characteristics of successful entrepreneurs.AACSB: Analytical ThinkingQuest. Category: Analytical28) The number one characteristic shared by successful entrepreneurs is passion for the business.Answer: TRUEDiff: 1LO: 1.3: Identify four main characteristics of successful entrepreneurs.AACSB: Reflective ThinkingQuest. Category: Critical Thinking29) The four main characteristics of successful entrepreneurs are: passion for the business,execution intelligence, product/customer focus, and tenacity despite failure.Answer: TRUEDiff: 2LO: 1.3: Identify four main characteristics of successful entrepreneurs.AACSB: Reflective ThinkingQuest. Category: Critical Thinking30) The passion that entrepreneurs have typically stems from the ability to pursue their ownideas.Answer: FALSEDiff: 3LO: 1.3: Identify four main characteristics of successful entrepreneurs.AACSB: Reflective ThinkingQuest. Category: Critical Thinking

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1031) Describe the four main characteristics of successful entrepreneurs.Answer: The four main characteristics of successful entrepreneurs are: passion for the business,product/customer focus, tenacity despite failure, and execution intelligence. The number onecharacteristic shared by successful entrepreneurs is passion for their business, whether it is in thecontext of a new firm or an existing business. This passion typically stems from theentrepreneur's belief that the business will positively influence people's lives. A second definingcharacteristic of successful entrepreneurs is a product/customer focus. This characteristicunderscores two of the most important elements in any business-products and customers. Thethird characteristic of successful entrepreneurs is tenacity despite failure. Because entrepreneursare typically trying something new, the failure rate associated with their efforts is naturally high.The litmus test for entrepreneurs is their ability to persevere through setbacks and failures. Thefourth characteristic of successful entrepreneurs is execution intelligence. The ability toeffectively execute a business idea means developing a business model, putting together a newventure team, raising money, establishing partnerships, managing finances, leading andmotivating employees, and so on.Diff: 2LO: 1.3: Identify four main characteristics of successful entrepreneurs.AACSB: Reflective ThinkingQuest. Category: Critical Thinking32) Which of the following isNOTone of the five common myths about entrepreneurs?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.Answer: ADiff: 2LO: 1.4: Explain five common myths regarding entrepreneurship.AACSB: Reflective ThinkingQuest. Category: Critical Thinking33) According to the textbook, entrepreneurs are ________.A) gamblersB) moderate risk takersC) aggressive risk takersD) forceful risk takersE) minimal risk takersAnswer: BDiff: 2LO: 1.4: Explain five common myths regarding entrepreneurship.AACSB: Reflective ThinkingQuest. Category: Critical Thinking

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1134) Which of the following wasNOTidentified in the textbook as one of the common traits andcharacteristics of entrepreneurs?A) Lengthy attention spanB) Self-starterC) Tolerant of ambiguityD) TenaciousE) Pessimistic dispositionAnswer: EDiff: 3LO: 1.4: Explain five common myths regarding entrepreneurship.AACSB: Reflective ThinkingQuest. Category: Critical Thinking35) Suppose you are a Small Business Development Center counselor and you're looking at thepersonality profiles of five potential entrepreneurs. Based on the profiles, which individual hasthe most desirable mix of personal characteristics to become a successful entrepreneur?A) Candidate A: visionary, energetic, moderate risk takerB) Candidate B: seeks recognition, self-starter, creativeC) Candidate C: visionary, high-risk taker, energeticD) Candidate D: high-risk taker, achievement-motivated, networkerE) Candidate E: tolerant for ambiguity, seeks recognition, motivated primarily by moneyAnswer: ADiff: 3LO: 1.4: Explain five common myths regarding entrepreneurship.AACSB: Reflective ThinkingQuest. Category: Critical Thinking36) Which of the following isNOTa personality trait or characteristic common amongentrepreneurs?A) PromoterB) VisionaryC) Short attention spanD) Alert to opportunitiesE) Self-starterAnswer: CDiff: 3LO: 1.4: Explain five common myths regarding entrepreneurship.AACSB: Reflective ThinkingQuest. Category: Critical Thinking

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1237) Which of the following statements is correct regarding entrepreneurial activity and ageranges?A) The highest percentage of entrepreneurs falls in the 20 to 34 age range.B) The highest percentage of entrepreneurs falls in the 45 to 54 age range.C) The highest percentage of entrepreneurs falls in the 35 to 44 age range.D) The highest percentage of entrepreneurs falls in the 55 to 64 age range.E) The highest percentage of entrepreneurs falls in the 60+ age range.Answer: BDiff: 2LO: 1.4: Explain five common myths regarding entrepreneurship.AACSB: Application of KnowledgeQuest. Category: Application38) Which of the following statements is incorrect regarding entrepreneurial activity and agerange?A) The highest percent of business owners fall in the 45-54 age range.B) The lowest percent of business owners fall in the 60+ age range.C) The majority of business founders have no prior work experience.D) The majority of individuals who start companies are in their forties and fifties.E) Entrepreneurial activity is fairly evenly spread out over age ranges.Answer: CDiff: 2LO: 1.4: Explain five common myths regarding entrepreneurship.AACSB: Analytical ThinkingQuest. Category: Analytical39) According to Chapter 1, investors often cite the ________ as their most important criterion inthe decision to fund new ventures.A) financial position of the new ventureB) strength of the industry the new firm is enteringC) strength of the new venture's marketing planD) strength of the business ideaE) strength of the entrepreneurAnswer: EDiff: 2LO: 1.4: Explain five common myths regarding entrepreneurship.AACSB: Reflective ThinkingQuest. Category: Critical Thinking

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1340) According to Chapter 1, a sentiment that venture capitalists often express is that ________.A) the strength of the entrepreneur and the strength of the business idea are of equal importanceB) they would never fund a strong entrepreneur with a weak business ideaC) they would rather fund a strong entrepreneur with a mediocre business idea than fund a strongbusiness idea with a mediocre entrepreneurD) a new venture's marketing plan is more important than either the strength of the entrepreneuror the strength of the business ideaE) they would rather fund a strong business idea with a mediocre entrepreneur than fund a strongentrepreneur with a mediocre business ideaAnswer: CDiff: 3LO: 1.4: Explain five common myths regarding entrepreneurship.AACSB: Analytical ThinkingQuest. Category: Analytical41) Pacific Fishing LLC is a startup that is working on a new technology for the fishing industry.Because the technology it's working on is highly proprietary, the company is located in thewarehouse district of a large western city. Pacific's founder, Ray Sims, rarely gives interviewsand is careful to not divulge much about what the company is doing. Which of the followingcommon myths about entrepreneurs does the behavior of its founder, Ray Sims, dispel?A) Entrepreneurs are born, not made.B) Entrepreneurs are gamblers.C) Entrepreneurs are motivated primarily by money.D) Entrepreneurs should be young and energetic.E) Entrepreneurs love the spotlight.Answer: EDiff: 2LO: 1.4: Explain five common myths regarding entrepreneurship.AACSB: Reflective ThinkingQuest. Category: Critical Thinking42) According to the consensus of the research, some people are genetically predisposed to beentrepreneurs.Answer: FALSEDiff: 2LO: 1.4: Explain five common myths regarding entrepreneurship.AACSB: Analytical ThinkingQuest. Category: Analytical43) Entrepreneurs are usually moderate, rather than high, risk-takers.Answer: TRUEDiff: 3LO: 1.4: Explain five common myths regarding entrepreneurship.AACSB: Reflective ThinkingQuest. Category: Critical Thinking

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1444) Entrepreneurs are motivated primarily by money.Answer: FALSEDiff: 2LO: 1.4: Explain five common myths regarding entrepreneurship.AACSB: Reflective ThinkingQuest. Category: Critical Thinking45) According to the textbook, there are three types of startup firms: ________.A) lifestyle firms, general firms, and entrepreneurial firmsB) standard-of-living firms, statutory firms, and general firmsC) entrepreneurial firms, standard-of-living firms, and statutory firmsD) lifestyle firms, salary-substitute firms, and entrepreneurial firmsE) innovative firms, entrepreneurial firms, and standard firmsAnswer: DDiff: 2LO: 1.5: Describe the three types of start-up firms.AACSB: Reflective ThinkingQuest. Category: Critical Thinking46) Colorado Sandwich, Soup and Salad is a casual dining restaurant that has been owned byStephanie Peterson for the past 14 years. The restaurant offers a menu that is typical for casualdining restaurants and affords Stephanie a level of income that is similar to what she would earnin a conventional job. According to the textbook, Colorado Sandwich, Soup and Salad is anexample of a(n) ________ firm.A) salary-substituteB) entrepreneurialC) quality-of-lifeD) lifestyleE) industry-standardAnswer: ADiff: 2LO: 1.5: Describe the three types of start-up firms.AACSB: Reflective ThinkingQuest. Category: Critical Thinking

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