MGT Chapter 6

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Which of the following is the process of starting a business venture, organizing the resources, and taking the risks?
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Entrepreneurship
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A(n) ____ is someone who recognizes a viable idea for a business product or service and carries it out.
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entrepreneur
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Being interested in computers, Jose Cohata came up with an idea of personalizing the screen saver programs with family pictures. After trying a couple of programs, Jose started marketing this service to neighbors and area businesses. Jose’s activities can be described as a(n)
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entrepreneurship
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An entrepreneur
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all of these.
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Tracy’s Trikes believes that each employee should enjoy the idea of working on something that is new, creative, or personally meaningful. Tracy’s Trikes exemplifies which of the categories of small business owners?
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Idealists
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If a small business owner enjoys the chance to balance work and personal life, he would be considered a(n)
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sustainer
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Which of the following are high-energy people who enjoy handling every detail of their own businesses?
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Jugglers
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Small businesses represent ____ percent of all firms and employ about half of all private sector employees.
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99.7
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Which of the following is the type of business that most entrepreneurs start?
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All of these
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According to the Small Business Administration, which of these defines a small business?
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The SBA’s definition of small business is one that is independently owned and operated and not dominant in its field of action.
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Today, inspired by the growth of companies such as Amazon.com, entrepreneurs are flocking to the ____ to start new businesses.
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Internet
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Small firms that file for patents typically produce ____ more patents per employee than large patenting firms.
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13 to 14 times
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Which of the following demographic factors distinguish entrepreneurs from others?
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They are likely the children of immigrants.
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In the United States, minorities own ____ firms.
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5.8 million
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____ refers to the belief by individuals that their future is within their control and that external forces will have little influence.
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Internal locus of control
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Lauren Dean strongly believes in her abilities and feels that she controls her own destiny. She can be described as having a(n)
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internal locus of control.
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Which of these characteristics is associated with entrepreneurship?
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An internal locus of control
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The belief by individuals that their future is not within their control, but rather is influenced by some external force is considered
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an external locus of control.
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Which of the following is the belief by individuals that their future is not within their control but rather is influenced by external forces?
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External locus of control
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All of these are entrepreneurial characteristics EXCEPT
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external locus of control.
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Which of these means that people are motivated to excel and pick situations in which success is likely?
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Need to achieve
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Ami believes that such things as luck or chance will determine her future success. Ami has
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an external locus of control.
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Ginger likes to set her own goals, which have an intermediate level of difficulty. Which of the entrepreneurial characteristics does she probably possess?
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A high need for achievement
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Melissa is a very good middle manager. However, she has long wanted to open her own business. Which of Melissa’s characteristics is not consistent with entrepreneurship?
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Taryn tends to put things off till later.
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Which of the following is the psychological characteristic that allows a person to be untroubled by disorder and uncertainty?
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Tolerance for ambiguity
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Entrepreneurs tend to
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be impatient.
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What is the primary goal of the social entrepreneur?
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improving society
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____ combines creativity, business smarts, passion, and hard work of the traditional entrepreneur with a mission to change the world for better.
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Social entrepreneurship
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One of the first characteristics or points of a successful business plan is
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demonstrate a clear, compelling vision that creates an air of excitement.
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Which of the following is the most cited source of new business ideas?
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In-depth understanding of industry/profession
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Before opening his own business, Kareem was writing a report that details the specifics of his ideas and future business operations. This document is known as
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a business plan.
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Which of these refers to an unincorporated business owned by an individual for profit?
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Sole proprietorship
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Which of the following is NOT an appropriate legal structure for an entrepreneurial company?
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Trade alliance
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Which of the following is a popular small business form because it is easy to start and has few legal requirements?
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A proprietorship
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Vaughn Hager started his one-man consulting business under the name Hager Associates. The legal structure for the company can best be described as a(n)
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proprietorship
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A(n) ____ has a legal life of its own.
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corporation
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The drawback(s) of proprietorship include
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difficulty in obtaining financing.
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Blake, Madison and Sean started selling computer software on college campuses under the name Student Software Company. Each person contributed $1500 toward start-up costs and agreed on dividing costs and profits equally. The legal structure for the company can best be described as a
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partnership.
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Which of the following is an unincorporated business owned by two or more?
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A partnership
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An artificial entity created by the state and existing apart from its owners is known as
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a corporation.
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What are the two principal advantages of forming a corporation?
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Continuity and limits on owner’s liability
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____ refers to borrowing money that has to be repaid in order to start a business.
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Debt financing
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A group of companies or individuals that invests money in new or expanding businesses for ownership and potential profits is known as
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a venture capital firm.
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A venture capital firm wants to invest in businesses with a high rate of return. In return, they will
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all of these.
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Which of these refers to the financing that consists of funds that are invested in exchange for ownership in the company?
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Equity financing
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Which of these offers the advantage that the entrepreneur has the ability to develop and design the business in the entrepreneur’s own way?
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Start a new business
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An advantage of which of these tactics is that there is a shorter start-up time and an existing track record?
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Buy an existing business
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____ refers to an arrangement by which the owner of a product or service allows others to purchase the right to distribute the product or service with help from the owner.
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Franchising
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Which of these is true about the business incubator?
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It provides shared office space, management support services, and management advice.
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____ was one of the top 10 fastest-growing franchises in 2008.
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Subway
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The majority of the incubators are operated by
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non-profit organizations.
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Entrepreneurs who aspire to start online businesses implement all the following steps EXCEPT:
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determine physical location.
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Managers must tailor their planning, organizing, leading, and controlling to fit
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the current stage of growth.
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Marion is an entrepreneur. At this stage of his company’s growth, his main concerns are do we have enough customers and money. What stage of growth is Marion’s company in?
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Start-up
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Samuel Rohrer is providing consumers with a new, unique business. The stage of the growth where his business has demonstrated that it is a workable business entity is considered the
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survival stage.
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At which stage of growth is the company if it is solidly based and profitable?
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Success
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Janelle is very innovative and attentive to detail. As she starts her own company, she leads her employees and ensures that every detail is attended to. As her company grows, she finds it more difficult to deal with and motivate her employees. She is more interested in the product. What stage of growth is Janelle’s company going through?
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Success
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Formal planning, such as a strategic plan, is usually instituted during which stage?
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takeoff
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The key problem, at the ____ stage of growth, is how to grow rapidly and finance that growth.
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takeoff
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ABC company has made substantial financial gains, but may start to lose the advantages of small size. Which stage of growth is this company experiencing?
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Resource maturity
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The Swingset Company is at the stage where if financing is available and it is properly managed, rapid growth can occur. What stage is the Swingset Company experiencing?
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Takeoff
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During the latter stages of entrepreneurial growth, the manager
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all of these.
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The ____ is the driving force during the early stages of development of a business.
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leader’s vision
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During the ____ stage, the company will need to make greater use of budgets, standard cost systems, and statistical reports.
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takeoff
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Alfred is interested in opening his own business, so he pays a visit to the local Small Business Administration (SBA) to learn more about the potential risks. He learns that about _____ percent of all small businesses fail within two years of opening.
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30
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Connie, a single mother and home-business entrepreneur, enjoys running her own business. However, because she is busy balancing work and family, she does not foresee her home business growing significantly in the near future. Connie can best be described as what type of entrepreneur?
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Sustainer
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In 2008, which country had the largest percentage of individuals age 18 to 64 that were active in starting or managing a business?
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Bolivia
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The Small Business Association (SBA) reports that small businesses create at least _______ percent of America’s new jobs.
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64
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What percentage of women entrepreneurs have employees?
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Twenty
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Celine has an unwavering belief in her new start-up company. She possesses intense focus and takes unconventional risks to make her new company successful. These examples most closely relate to which personality trait of entrepreneurs?
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High energy level
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Andrew, a young entrepreneur, feels sure about his ability to win customers through his people skills. He is comfortable with his ability to handle technical details and feels that he is able to keep his business moving. This most closely relates to which personality trait of entrepreneurs?
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Self-confidence
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Social entrepreneurs are committed to both good business and:
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Positive social change
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Jamila is a successful artist and entrepreneur who makes all of her work out of recycled goods because she believes in sustainability. She can be described as a social entrepreneur that is committed to:
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Environmental protection
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The most common reason for becoming an entrepreneur is:
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To be one’s own boss
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All of the following are common reasons why small business ventures fail EXCEPT:
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Long-term focus
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What is the most common way that entrepreneurs finance the start-up of a new business?
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Self-financing from savings or credit cards
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Wendy enjoys making crafts and giving these away as gifts to friends and family. One day, she decided to quit her job and make crafts full-time, selling them on her new company Web site. Which tactic of becoming a business owner did Wendy use?
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New business start-up
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Max is the Web site manager for a local florist. The company’s owner would like Max to redesign the Web site so that customers can connect directly with florist employees on a daily basis about products and specials. This relates to which step in establishing an online business?
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Building online relationships
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Dawn, the finance manager of a sporting goods manufacturing company, uses accounting records to track monthly operational budgets to ensure that the company’s financial targets are being met. This is an important task in which stage of the managerial process?
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Controlling

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