Test Bank for Entrepreneurship Starting and Operating A Small Business, 6th edition JD LaRock

Test Bank For
Entrepreneurship Starting and Operating A Small Business, 6th edition JD LaRock Caroline
Glackin Steve Mariotti
Chapters 1-14


Entrepreneurship: Starting & Operating a Small Business, 6e (Mariotti)
Chapter 1 Entrepreneurs Recognize Opportunities

1) Products are tangible, meaning ________.
A) you can't actually touch them
B) you can sell them
C) you can touch them
D) you can see them
Answer: C
Diff: 1 Page Ref: 3
Learning Object.: 1.1 Summarize what entrepreneurs do.
AACSB Category: Reflective thinking

2) Entrepreneurs are often both owners and ________.
A) creditors
B) employees
C) customers
D) suppliers
Answer: B
Diff: 2 Page Ref: 3
Learning Object.: 1.1 Summarize what entrepreneurs do.
AACSB Category: Reflective thinking

3) An entrepreneur is a person who assumes the risks of organizing and managing a business for
the sake of reducing stress from the "rat race."
Answer: FALSE
Diff: 1 Page Ref: 3
Learning Object.: 1.1 Summarize what entrepreneurs do.
AACSB Category: Reflective thinking

4) Explain how entrepreneurs can add value to scarce resources, and what signal they use to
determine whether or not they are succeeding in doing so.
Answer: A scarce resource is something of value that can be used to make something else or to
fill a need. The French economist Jean Baptiste Say wrote at the turn of the 19th century: "The
entrepreneur shifts economic resources [like wood or coal] out of an area of lower and into an
area of higher productivity and greater yield." By doing this, Say argued, entrepreneurs add value
to scarce resources.
Diff: 3 Page Ref: 4
Learning Object.: 1.1 Summarize what entrepreneurs do.
AACSB Category: Analytical thinking

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,5) In the United States nearly half of the private workforce is represented by ________.
A) small business owners and their employees
B) entrepreneurs
C) corporations and their employees
D) women and minorities
Answer: A
Diff: 1 Page Ref: 7
Learning Object.: 1.2 Examine how free-enterprise economies work and how entrepreneurs fit
into them.
AACSB Category: Analytical thinking

6) A(n) ________ is the wealth and resources of a country or region, including its financial
structure.
A) economy
B) government
C) justice system
D) free enterprise
Answer: A
Diff: 2 Page Ref: 4
Learning Object.: 1.2 Examine how free-enterprise economies work and how entrepreneurs fit
into them.
AACSB Category: Reflective thinking

7) Entrepreneurs have more control over more aspects of their working lives than employees. Of
which aspect of their working lives do employees have more control?
A) financial uncertainty
B) working conditions
C) time
D) encroachment on personal time
Answer: A
Diff: 2 Page Ref: 10
Learning Object.: 1.2 Examine how free-enterprise economies work and how entrepreneurs fit
into them.
AACSB Category: Reflective thinking

8) Cash or goods invested to generate income and wealth is called ________.
A) profit
B) capital
C) debt
D) liability
Answer: B
Diff: 1 Page Ref: 5
Learning Object.: 1.2 Examine how free-enterprise economies work and how entrepreneurs fit
into them.
AACSB Category: Reflective thinking



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,9) The United States economy is a free enterprise system. It is also referred to as a "free trade
system" because it is based on ________.
A) voluntary exchange
B) gambling and chance
C) involuntary exchange
D) government cooperation
Answer: A
Diff: 1 Page Ref: 5
Learning Object.: 1.2 Examine how free-enterprise economies work and how entrepreneurs fit
into them.
AACSB Category: Analytical thinking

10) Entrepreneurship can be very challenging. Which is not a typical challenge of being an
entrepreneur?
A) loneliness
B) financial reward
C) long hours
D) financial insecurity
Answer: B
Diff: 2 Page Ref: 10
Learning Object.: 1.2 Examine how free-enterprise economies work and how entrepreneurs fit
into them.
AACSB Category: Reflective thinking

11) When making an investment, always consider the ________, which is the cost of your next-
best investment.
A) next-investment cost
B) cost of goods sold
C) opportunity cost
D) marginal cost
Answer: C
Diff: 3 Page Ref: 11
Learning Object.: 1.2 Examine how free-enterprise economies work and how entrepreneurs fit
into them.
AACSB Category: Analytical thinking

12) The free-market system is also called ________.
A) volunteerism
B) socialism
C) capitalism
D) dogmatism
Answer: C
Diff: 1 Page Ref: 4
Learning Object.: 1.2 Examine how free-enterprise economies work and how entrepreneurs fit
into them.
AACSB Category: Reflective thinking


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, 13) Most of the world's businesses are ________ businesses.
A) small
B) medium-sized
C) large
D) family-owned
Answer: A
Diff: 1 Page Ref: 6
Learning Object.: 1.2 Examine how free-enterprise economies work and how entrepreneurs fit
into them.
AACSB Category: Analytical thinking

14) A company that has more than ________ employees and sales of more than $________
million per year is considered to be a "big" business.
A) 100/$5 million
B) 100/$10 million
C) 500/$5 million
D) 500/$10 million
Answer: C
Diff: 2 Page Ref: 6
Learning Object.: 1.2 Examine how free-enterprise economies work and how entrepreneurs fit
into them.
AACSB Category: Analytical thinking

15) Some of the world's greatest entrepreneurs have overcome challenges from their childhood
and youth, including all of these except one.
A) learning disabilities
B) abuse
C) extreme poverty
D) financial prosperity
Answer: D
Diff: 3 Page Ref: 9
Learning Object.: 1.2 Examine how free-enterprise economies work and how entrepreneurs fit
into them.
AACSB Category: Reflective thinking

16) The corporate equivalent of paying owners a portion of the business's profits is called a
________.
A) bonus
B) dividend
C) capital
D) revenues
Answer: B
Diff: 3 Page Ref: 9
Learning Object.: 1.2 Examine how free-enterprise economies work and how entrepreneurs fit
into them.
AACSB Category: Reflective thinking


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