Question 1

The Savvy Entrepreneurial Firm feature in Chapter 2 features three firms: Swipe Out Hunger, Soko, and Drive for Change. All three are examples of ________.
A) corporate ventures
B) non-altruistic ventures
C) targeted ventures
D) social ventures
E) for-profit ventures

Accepted Answer

The three firms featured in the Savvy Entrepreneurial Firm are examples of social ventures, which means they have a social or environmental mission as their primary goal rather than profit-making. Swipe Out Hunger and Drive for Change focus on addressing hunger and homelessness, while Soko aims to provide economic opportunity for marginalized artisans in Kenya.

Question 2

An individual who identifies a business idea on his or her own is referred to as a(n) ________ entrepreneur.
A) separate
B) functional
C) lone
D) individual
E) solo

Accepted Answer

Solo entrepreneur is the term used to describe an individual who identifies a business idea on their own and pursues it independently.

Question 3

Which of the following statements is incorrect in regard to entrepreneurial alertness?
A) The research findings on entrepreneurial alertness are conclusive.
B) Alertness is largely a learned skill.
C) People who have more knowledge of an area tend to be more alert to opportunities in that area than others.
D) The term "entrepreneurial alertness" is often associated with a "sixth sense" that seems to allow some people to see opportunities that others miss.
E) Entrepreneurial alertness is defined as the ability to notice things without engaging in deliberate search.

Accepted Answer

The statement that research findings on entrepreneurial alertness are conclusive is incorrect. While there has been research conducted on the topic, there is still ongoing debate and exploration of the concept of entrepreneurial alertness.

Question 4

Hulu.com allows people to watch television shows and movies on the Internet. Hulu.com's business opportunity was made possible by ________ that enhanced the ability of television shows and movies to be uploaded to the Internet and played by anyone with a suitable computer and an Internet connection.
A) social forces
B) technological advances
C) legal changes
D) regulatory changes
E) economic forces

Accepted Answer

Technological advances made it possible for television shows and movies to be uploaded to the internet, which allowed Hulu.com to offer their streaming services.

Question 5

Economic factors, social factors, technological advances, and political action and regulatory changes are the most important trends to follow in trying to identify opportunities.

Accepted Answer

Economic factors, social factors, technological advances, and political action and regulatory changes are key drivers of change and can create opportunities for businesses and individuals. It is important to keep an eye on these trends to capitalize on emerging markets and stay ahead of competition.

Question 6

Describe the three separate ways that entrepreneurs identify new business, product, and service opportunities.

Accepted Answer

The answer of Describe the three separate ways that entrepreneurs...

Question 7

A common way that gaps in the marketplace are recognized is ________.
A) by observing changing environmental trends
B) by recognizing problems that need to be solved
C) via studying industry reports
D) when people become frustrated because they can't find a product or service that they need and recognize that other people feel the same way
E) via combined focus groups and brainstorming sessions

Accepted Answer

When people become frustrated because they can't find a product or service that they need and recognize that other people feel the same way, it is a clear indication of a gap in the marketplace. This is often referred to as a "pain point" that needs to be addressed through the development of a new product or service. Methods such as observing changing environmental trends, studying industry reports, and using focus groups/brainstorming sessions can also identify gaps, but they may not be as direct or effective as realizing a "pain point".

Question 8

Kelly Pryor, who has launched several successful entrepreneurial firms, seems to have a "sixth sense" that allows him to see opportunities that others miss. Kelly's ability is referred to as _________.
A) individual awareness
B) cognitive alertness
C) entrepreneurial alertness
D) individual readiness
E) cognitive readiness

Accepted Answer

The ability to spot opportunities that others miss in entrepreneurship is referred to as entrepreneurial alertness.

Question 9

Which of the following statements is incorrect regarding the personal characteristics of entrepreneurs?
A) Some people think that entrepreneurs have a "sixth sense" that allows them to see opportunities that others miss.
B) The extent and depth of an individual's social network affects opportunity recognition.
C) Several studies show that prior experience in an industry actually blinds an entrepreneur to the recognition of new opportunities in the same industry.
D) Creativity is the process of generating novel or useful ideas.
E) The corridor principle states that once an entrepreneur starts a firm, he or she begins a journey down a path where "corridors" leading to new venture opportunities become apparent.

Accepted Answer

Several studies actually show that prior experience in an industry helps entrepreneurs recognize new opportunities in the same industry. Therefore, the statement that prior experience in an industry blinds an entrepreneur to the recognition of new opportunities in the same industry is incorrect.

Question 10

Many new businesses are successful by taking advantage of fads.

Accepted Answer

The answer of Many new businesses are successful by taking...

Question 11

The three ways to identify an opportunity include observing trends, solving a problem, and finding gaps in the marketplace.

Accepted Answer

This statement is true. Observing trends can help identify potential opportunities before they become mainstream, solving a problem can lead to the creation of a product or service that meets consumers' needs, and finding gaps in the marketplace can reveal areas where there is little to no competition, presenting an opportunity for new businesses to enter the market.

Question 12

The ability to notice things without engaging in deliberate search is referred to as ________.
A) cognitive alertness
B) cognitive awareness
C) managerial alertness
D) entrepreneurial alertness
E) individual awareness

Accepted Answer

The ability to notice things without engaging in deliberate search is referred to as entrepreneurial alertness. This term was coined by economist Israel Kirzner to describe the ability of entrepreneurs to perceive opportunities that others have not yet identified. It involves the ability to observe changes in the market and to see how these changes could be turned into innovative business opportunities.

Question 13

If a new firm was launched to help businesses comply with The Affordable Care Act, that opportunity was created by ________.
A) changes in economic forces
B) demographic changes
C) changes in social forces
D) changes in technological forces
E) political actions and regulatory changes

Accepted Answer

The Affordable Care Act is a regulation established by the government, meaning that a new firm launched to help businesses comply with it was created by political actions and regulatory changes.

Question 14

The What Wrong feature in Chapter 2 focuses on Everpix, a company that enabled users to organize and store photos online in an innovative manner. Regrettably, Everpix failed. According to the feature, Everpix's failure resulted from that fact that it's founders spent too much time ________.
A) and energy perfecting their service at the expense of building a business
B) and energy raising money at the expense of perfecting their service
C) networking at the expense of building a business
D) marketing their product at the expense of perfecting their service
E) analyzing their market at the expense of networking

Accepted Answer

The feature states that Everpix's founders spent too much time and energy perfecting their service at the expense of building a business, which ultimately led to their failure.

Question 15

Aging of the population, the increasing diversity of the workplace, and the continual migration of people from small towns and rural areas to cities are important economic trends.

Accepted Answer

The answer of Aging of the population, the increasing diversity...

Question 16

Clothing boutiques and specialty shops often start because there is a need for a particular product, but large retailers like Wal-Mart and Costco can't sell enough of the item to stock it on their shelves. If a clothing boutique started to sell designer clothes or clothing for hard-to-fit people because the clothing wasn't being offered by a larger retailer, the best way to describe how that idea was recognized is ________.
A) finding a gap in the marketplace
B) brainstorming
C) observing trends
D) solving a problem
E) talking to consumers

Accepted Answer

Finding a gap in the marketplace describes identifying a need or demand for a product or service that is not being met by larger retailers, and starting a business to fill that gap.

Question 17

Tish Cirovolo realized that there were no guitars on the market made specifically for women. As a result, she started Daisy Rock Guitars, a company that makes guitars just for women. Daisy Rock Guitars are stylish and come in feminine colors, and incorporate design features that accommodate a woman's smaller hand and build. The best way to describe how Cirovolo's business idea was recognized is ________.
A) brainstorming
B) talking to consumers
C) reading industry reports
D) observing trends
E) finding a gap in the marketplace

Accepted Answer

Tish Cirovolo realized that there were no guitars on the market made specifically for women, indicating that she found a gap in the marketplace.

Question 18

According to the textbook, research results over time consistently suggest that somewhere between ________ percent of those who start businesses got their ideas through social contacts.
A) 10 and 20
B) 20 and 30
C) 30 and 40
D) 40 and 50
E) 50 and 60

Accepted Answer

Research consistently shows that a significant portion, between 40 and 50 percent, of individuals who start businesses get their ideas through their social networks or contacts. This highlights the importance of networking in the entrepreneurial process.

Question 19

SafetyWeb is a Web-based service that helps parents protect their children's online reputation, privacy, and safety. Which of the following approaches to identifying an opportunity was most likely the impetus for SafetyWeb?
A) Observing trends
B) Studying government reports
C) Finding gaps in the marketplace
D) Talking to consumers
E) Solving a problem

Accepted Answer

SafetyWeb was likely created to solve the problem of parents needing to protect their children's online reputation, privacy, and safety.

Question 20

Casey Griggs is a very capable computer engineer. Recently, he noticed a problem that computer engineers have, and thought of a solution to the problem that might represent an opportunity for a new software product. Casey's idea for a new software product is an example of a(n) ________ discovery.
A) chance
B) serendipitous
C) traditional
D) conventional
E) opportune

Accepted Answer

Casey Griggs stumbled upon the idea of a new software product while working as a computer engineer, making his discovery serendipitous.

Quiz 2: Recognizing Opportunities and Generating Ideas

The Savvy Entrepreneurial Firm feature in Chapter 2 features three firms: Swipe Out Hunger, Soko, and Drive for Change. All three are examples of ________.

An individual who identifies a business idea on his or her own is referred to as a(n) ________ entrepreneur.

Which of the following statements is incorrect in regard to entrepreneurial alertness?

Economic factors, social factors, technological advances, and political action and regulatory changes are the most important trends to follow in trying to identify opportunities.

Describe the three separate ways that entrepreneurs identify new business, product, and service opportunities.

A common way that gaps in the marketplace are recognized is ________.

Kelly Pryor, who has launched several successful entrepreneurial firms, seems to have a "sixth sense" that allows him to see opportunities that others miss. Kelly's ability is referred to as _________.

Which of the following statements is incorrect regarding the personal characteristics of entrepreneurs?

Many new businesses are successful by taking advantage of fads.

The three ways to identify an opportunity include observing trends, solving a problem, and finding gaps in the marketplace.

The ability to notice things without engaging in deliberate search is referred to as ________.

If a new firm was launched to help businesses comply with The Affordable Care Act, that opportunity was created by ________.

The What Wrong feature in Chapter 2 focuses on Everpix, a company that enabled users to organize and store photos online in an innovative manner. Regrettably, Everpix failed. According to the feature, Everpix's failure resulted from that fact that it's founders spent too much time ________.

Aging of the population, the increasing diversity of the workplace, and the continual migration of people from small towns and rural areas to cities are important economic trends.

According to the textbook, research results over time consistently suggest that somewhere between ________ percent of those who start businesses got their ideas through social contacts.

SafetyWeb is a Web-based service that helps parents protect their children's online reputation, privacy, and safety. Which of the following approaches to identifying an opportunity was most likely the impetus for SafetyWeb?

Casey Griggs is a very capable computer engineer. Recently, he noticed a problem that computer engineers have, and thought of a solution to the problem that might represent an opportunity for a new software product. Casey's idea for a new software product is an example of a(n) ________ discovery.