Question 1

Paul is more deliberate and slower to act, and he tends to avoid risk. Paul is better suited to be a(n) ________ than a(n) ________.

Accepted Answer

Paul's tendency to avoid risk and move slowly make him better suited for a management role where he can focus on efficient operations and minimize risk rather than taking big risks as an entrepreneur. This eliminates choices A, C, and E as they all involve owning or starting a business, which would require more risk-taking and quick decision making. Choice B involves managing an existing business, which would allow Paul to use his strengths of being deliberate and risk-averse.

Question 2

________ helps an entrepreneur succeed.

Accepted Answer

Being an entrepreneur means dealing with a lot of ambiguity and uncertainty. Successful entrepreneurs need to tolerate this and even thrive in it. They need to be able to make decisions without all the information and take calculated risks. Encouraging centralization, being risk-averse, maintaining the status quo, and fending off constructive criticism are not conducive to entrepreneurial success.

Question 3

Suzette's husband told her, "I admire your boldness, but I'm not sure that you should open that business. I've heard that entrepreneurs are ________." Suzette replied, "That's a common myth. In fact, entrepreneurs take very careful, calculated risks and are not afraid to act on those decisions."

Accepted Answer

The husband suggests that entrepreneurs are like gamblers, implying that they take wild risks without calculating the outcome. Suzette disagrees and says that entrepreneurs take careful, calculated risks.

Question 4

Most small business ventures are located in the ________ quadrant of the entrepreneurial strategy matrix.

Accepted Answer

Most small business ventures are typically located in the lower right quadrant of the entrepreneurial strategy matrix, which represents low innovation and high risk.

Question 5

In the context of successful business models for e-commerce, sites that pay commissions to other sites to drive business to their own sites involve the ________ model.

Accepted Answer

The affiliate model involves paying commissions to other sites (the affiliates) for driving business to the original site.

Question 6

________ is an entrepreneurial alliance between an innovator who has created at least one successful store and wants to grow and a partner who manages a new store of the same type in a new location.

Accepted Answer

Franchising allows an innovator to expand their successful store by partnering with a new store manager in a new location. The innovator provides the franchisee with the established business model, brand name, and support, while the franchisee operates the new store and pays fees to the innovator. This means the innovator can grow their business without having to invest in and manage multiple new locations themselves.

Question 7

Paige independently owns and operates HiZ Inc., a company with 22 employees. She manages aggressively and expects rapid sales and profit growth. Paige's company is considered a(n) ________ venture.

Accepted Answer

Paige's business is entrepreneurial because she independently owns and operates it with the expectation of rapid growth, which is the hallmark of an entrepreneurial venture. Intrapreneurial ventures are those launched by employees within a larger organization, while franchises are businesses that operate under an established brand and business model. Small businesses may or may not have aggressive growth goals, and dependent ventures rely on another business for their success.

Question 8

________ create new independent businesses with the benefit of corporate support.

Accepted Answer

Intrapreneurs are employees within a larger company who are encouraged to create and develop new businesses or projects that will benefit the company as a whole. They have the advantage of corporate support in terms of funding, resources, and expertise, but they operate independently as individual entrepreneurs.

Question 9

In the context of the entrepreneurial strategy matrix, a ________ is most likely to have the highest risks and returns.

Accepted Answer

A new passenger vehicle involves significant investment in research, development, production, and marketing, and it targets a broad market, which makes it likely to have the highest risks and returns compared to the other options listed.

Question 10

In the context of successful business models for e-commerce, the ________ model involves charging monthly or annual fees for website visits or access to website content.

Accepted Answer

The subscription model involves charging users a monthly or annual fee for accessing website content or services. This model is common among content-based e-commerce businesses, such as streaming services or online educational platforms.

Question 11

Ramon, I believe that you will succeed," said Juan, his mentor. "When an entrepreneur is contemplating a new business, the very first step is to have ________. You are on the right track."

Accepted Answer

The sentence states that the very first step is to have something, and option A is the only choice that completes the sentence grammatically and makes sense in terms of starting a business. Financial capital, a good location, family support, and investors may all be important for starting a business, but they do not fulfill the requirement stated in the sentence for the very first step.

Question 12

In the context of the entrepreneurial strategy matrix, a novel product idea that involves a large financial investment would be described as

Accepted Answer

A novel product idea that involves a large financial investment would be considered high innovation, as it is a new and unique idea that requires significant resources to develop. At the same time, it also carries a high level of risk, as the investment may not yield a return if the market does not receive the product well or if there are unforeseen complications in development or launch. Therefore, the best choice is B, high innovation/high risk.

Question 13

RanMark Corp. brings buyers and sellers together and charges a commission for each sale. RanMark Corp. is a(n) ________ business model.

Accepted Answer

RanMark Corp. acts as an intermediary by facilitating the transaction between buyers and sellers and earns a commission, which is a classic example of an intermediary business model.

Question 14

The side street effect refers to

Accepted Answer

The side street effect refers to the appearance of unexpected opportunities as one follows a plan. It is often described as a positive outcome of being open-minded and flexible, allowing entrepreneurs to capitalize on unforeseen opportunities that may arise as they pursue their original goals.

Question 15

Entrepreneurs experience stress, but they also have high job satisfaction. They tend to be ________ healthy and ________ likely to retire than those who work for others.

Accepted Answer

Studies show that entrepreneurs tend to have higher job satisfaction despite experiencing stress. They also tend to be more healthy than those who work for others, but they are less likely to retire as they may have a strong passion for their work and want to continue to be involved in their business.

Question 16

A small business is often defined as having fewer than ________ employees, as well as being independently owned and operated.

Accepted Answer

In the United States, the Small Business Administration (SBA) defines a small business as having fewer than 500 employees, which is a common standard for distinguishing small businesses from larger enterprises.

Question 17

Beane Inc., an entrepreneurial venture, does not have any distinctive services when compared with the well-established competitors in the same field, and the business will require a sizable investment. In which quadrant of the entrepreneurial strategy matrix will the venture be placed?

Accepted Answer

According to the entrepreneurial strategy matrix, a venture with low innovation and high risk is placed in Quadrant III. As Beane Inc. does not have any distinctive services and requires a sizable investment, it falls under low innovation. At the same time, as it does not have any unique selling proposition and will face well-established competitors, it will have a high risk of failure. Hence, Beane Inc. will be placed in Quadrant III of the entrepreneurial strategy matrix.

Question 18

A new technique for extracting oil and gas-called "fracking"-spurred an economic boom in the formerly sleepy town of Oilville, located in what had been thought to be a depleted oil field. Workers swarmed into the town, and Karen started a laundry service to meet their needs. In this case, Karen had spotted an entrepreneurial opportunity created by the new extraction technique, or a ________, which in turn created an oil boom, or a(n) ________.

Accepted Answer

The correct answer is A because the new technique for extracting oil and gas (fracking) represents a technological discovery that led to an economic boom (an economic dislocation) in Oilville.

Question 19

Tonda spotted, created, and exploited a(n) ________ for ride-sharing services for elderly customers that big companies had ________ and, in so doing, she captured the market with her simpler, cheaper, more accessible, and more convenient services.

Accepted Answer

Tonda identified an opportunity for ride-sharing services for elderly customers that big companies had avoided, or chosen not to pursue. She was able to capture the market with her simpler, cheaper, more accessible, and more convenient services. The other answer choices are not applicable or do not accurately reflect the situation.

Question 20

Entrepreneurs start their own firms for all of the following reasons EXCEPT the

Accepted Answer

The statement lists all common reasons for starting a business except for the desire to manage other people, which is not necessarily a driving factor for every entrepreneur.

Quiz 6: Entrepreneurship

Paul is more deliberate and slower to act, and he tends to avoid risk. Paul is better suited to be a(n) than a(n) .