Test Bank Entrepreneurship Starting and Operating a Small Business 6th Edition LaRock PDF

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Entrepreneurship: Starting and Operating a Small Business, 6e (LaRock/Mariotti/Glackin)
Chapter 1 Entrepreneurs and Entrepreneurship

1) Products are tangible, meaning ________.
A) you cannot touch them
B) you can sell them
C) you can touch them
D) you can see them
Answer: C
Diff: Easy
Learning Objective: 1.1 Summarize what entrepreneurship is and what entrepreneurs do.
AACSB: Reflective Thinking

2) Entrepreneurs are often both owners and ________.
A) creditors
B) employees
C) customers
D) suppliers
Answer: B
Diff: Moderate
Learning Objective: 1.1 Summarize what entrepreneurship is and what entrepreneurs do.
AACSB: Reflective Thinking

3) What is a key characteristic of opportunity-based entrepreneurs?
A) They are always forced into self-employment.
B) They start businesses mainly to replace lost income.
C) They start businesses to exploit a perceived or created opportunity.
D) They avoid thinking about the future.
Answer: C
Diff: Moderate
Learning Objective: 1.1 Summarize what entrepreneurship is and what entrepreneurs do.
AACSB: Reflective Thinking

4) A necessity-based entrepreneur starts a business to exploit a perceived opportunity or to
pursue one that they created.
Answer: FALSE
Diff: Easy
Learning Objective: 1.1 Summarize what entrepreneurship is and what entrepreneurs do.
AACSB: Reflective Thinking




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,5) Explain how entrepreneurs can add value to scarce resources, and what signal they use to
determine whether 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 that entrepreneurs
"added value to scarce resources".
Diff: Challenging
Learning Objective: 1.1 Summarize what entrepreneurship is and what entrepreneurs do.
AACSB: Analytical Thinking

6) Why are teamwork and collaboration important?
A) They are needed to complete most school projects.
B) They generally only matter to managers and leaders.
C) They help businesses succeed because many stakeholders are involved.
D) They are useful only in very small firms.
Answer: C
Diff: Moderate
Learning Objective: 1.10 Develop skills for a future career - employment or entrepreneurship.
AACSB: Application of Knowledge

7) Why are entrepreneurial principles and mindset valuable even for people who never start a
business?
Answer: Entrepreneurial principles and mindset are life skills that apply beyond business,
helping individuals become more valuable and valued members of teams and communities. By
developing competencies like communication, critical thinking, collaboration, creativity,
leadership, ethics, and technology skills, people can contribute more effectively in any
organization, whether for-profit, not-for-profit, new, or established.
Diff: Moderate
Learning Objective: 1.10 Develop skills for a future career - employment or entrepreneurship.
AACSB: Application of Knowledge

8) The economy of the United States is a ________ system.
A) free-enterprise
B) controlled
C) closed
D) centralized
Answer: A
Diff: Easy
Learning Objective: 1.2 Examine how free-enterprise economies work and how entrepreneurs
fit into them.
AACSB: Analytical Thinking




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,9) 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: Moderate
Learning Objective: 1.2 Examine how free-enterprise economies work and how entrepreneurs
fit into them.
AACSB: Reflective Thinking

10) 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: Moderate
Learning Objective: 1.2 Examine how free-enterprise economies work and how entrepreneurs
fit into them.
AACSB: Reflective Thinking

11) Cash or goods invested to generate income and wealth is called ________.
A) profit
B) capital
C) debt
D) liability
Answer: B
Diff: Easy
Learning Objective: 1.2 Examine how free-enterprise economies work and how entrepreneurs
fit into them.
AACSB: Reflective Thinking

12) The U.S. 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: Easy
Learning Objective: 1.2 Examine how free-enterprise economies work and how entrepreneurs
fit into them.
AACSB: Analytical Thinking

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, 13) Which of the following is not a characteristic of the free-market system?
A) Individuals and companies may compete for their own economic gains.
B) Private wealth and property ownership are permissible.
C) Prices are determined by a central authority.
D) Free-market forces primarily determine prices.
Answer: C
Diff: Challenging
Learning Objective: 1.2 Examine how free-enterprise economies work and how entrepreneurs
fit into them.
AACSB: Analytical Thinking

14) The free-market system is also called ________.
A) volunteerism
B) socialism
C) capitalism
D) dogmatism
Answer: C
Diff: Easy
Learning Objective: 1.2 Examine how free-enterprise economies work and how entrepreneurs
fit into them.
AACSB: Reflective Thinking

15) In a free-market system, which is also called capitalism, individuals and companies compete
for their own economic gains.
Answer: TRUE
Diff: Moderate
Learning Objective: 1.2 Examine how free-enterprise economies work and how entrepreneurs
fit into them.
AACSB: Analytical Thinking

16) The economy of the United States is a free-enterprise system.
Answer: TRUE
Diff: Easy
Learning Objective: 1.2 Examine how free-enterprise economies work and how entrepreneurs
fit into them.
AACSB: Analytical Thinking

17) Most of the world's businesses are ________ businesses.
A) small
B) medium-sized
C) large
D) family-owned
Answer: A
Diff: Easy
Learning Objective: 1.3 Describe small business.
AACSB: Analytical Thinking

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