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ENT 101 Week 2 Quiz – Introduction to Entrepreneurship
Toronto Metropolitan University – Comprehensive Practice Exam & Study Guide – 2026
Update
Part 1: Entrepreneurial Mindset Foundations (Questions 1–20)
1. Marcus believes entrepreneurial success depends entirely on his own strategic decisions
and effort, not on market luck or competitors. This cognitive tendency is called:
A. External locus of control
B. Internal locus of control
C. Cassandra fallacy
D. Cognitive adaptability
Answer: B
Explanation: An internal locus of control is the belief that one's own actions and decisions
determine outcomes, driving entrepreneurs to take initiative rather than rely on luck.
2. After receiving harsh feedback on her startup pitch, Sarah immediately signs up for a
finance workshop to close her knowledge gap, believing she can learn the necessary skills.
Carol Dweck would classify this response as:
A. Fixed mindset
B. Growth mindset
C. Functional fixedness
D. Planning fallacy
Answer: B
Explanation: A growth mindset is the belief that abilities can be developed through
dedication and hard work—a key driver of entrepreneurial resilience.
3. Instead of setting rigid five-year revenue targets, David evaluates his personal network,
technical skills, and available capital when founding his tech company, seeing what
venture naturally emerges. This approach is called:
A. Causal reasoning
B. Planned abandonment
C. Effectuation
D. Reverse innovation
Answer: C
Explanation: Effectuation theory holds that expert entrepreneurs start with available means
and let goals emerge over time, rather than starting with predetermined goals.
, 2
4. Elena's medical device startup has been rejected by investors twenty times, yet she
continues refining her prototype and pitch with unwavering passion. Angela Duckworth
would identify this trait as:
A. Entrepreneurial alertness
B. Ambiguity tolerance
C. Overconfidence bias
D. Grit
Answer: D
Explanation: Grit is defined as passion and perseverance for long-term goals, enabling
entrepreneurs to persist through repeated failure.
5. An entrepreneur identifies a fatal flaw in a competitor's product that will cause
regulatory failure, but when he warns the market, no one believes him until the failure
actually occurs. This scenario illustrates:
A. Cassandra fallacy
B. Planning fallacy
C. Confirmation bias
D. Anchoring effect
Answer: A
Explanation: The Cassandra fallacy occurs when an entrepreneur correctly foresees a future
problem or market shift but is ignored by others until the event actually happens.
6. What does "tolerance for ambiguity" mean for an entrepreneur?
A. Preferring to work alone
B. Being able to function effectively without having all the answers or certainty about
outcomes
C. Relying on data analysis for every decision
D. Avoiding all risk
Answer: B
Explanation: Tolerance for ambiguity means entrepreneurs can make decisions and take
action in environments where information is incomplete and outcomes are unpredictable.
7. Which cognitive bias causes entrepreneurs to overestimate their probability of success
and underestimate their probability of failure?
A. Confirmation bias
B. Hindsight bias
C. Overconfidence bias
D. Anchoring bias
, 3
Answer: C
Explanation: Overconfidence bias leads entrepreneurs to overestimate their abilities and
control over outcomes. While optimism is necessary, unchecked overconfidence is a major
cause of venture failure.
8. "Cognitive adaptability" refers to an entrepreneur's ability to:
A. Memorize complex business models
B. Be dynamic, flexible, and self-regulating in thinking processes
C. Adapt products to different physical environments
D. Defeat competitors through aggressive marketing
Answer: B
Explanation: Cognitive adaptability enables entrepreneurs to pivot, question assumptions,
and learn quickly from mistakes.
9. In contrast to causal reasoning, effectuation begins with:
A. A specific goal, then searching for resources to achieve it
B. A detailed five-year business plan
C. The means one possesses (who I am, what I know, whom I know), then imagining possible
outcomes
D. A focus on eliminating all competition
Answer: C
Explanation: Sarasvathy's effectuation theory argues that expert entrepreneurs start from
the "bird in hand" logic (means-driven) rather than predictive logic (goal-driven).
10. The theory of entrepreneurial alertness (Israel Kirzner) suggests that entrepreneurs:
A. Wait for market reports to identify opportunities
B. Have a unique ability to notice opportunities others overlook
C. Only succeed in high-tech industries
D. Must have a formal business education
Answer: B
Explanation: Entrepreneurial alertness is a heightened sensitivity to unnoticed opportunities
in the environment.
11. A person starts a business because they feel frustrated by limited advancement at their
current company. This is an example of which motivation?
A. Pull motivation
B. Push motivation
C. Effectuation
D. Market-driven opportunity
ENT 101 Week 2 Quiz – Introduction to Entrepreneurship
Toronto Metropolitan University – Comprehensive Practice Exam & Study Guide – 2026
Update
Part 1: Entrepreneurial Mindset Foundations (Questions 1–20)
1. Marcus believes entrepreneurial success depends entirely on his own strategic decisions
and effort, not on market luck or competitors. This cognitive tendency is called:
A. External locus of control
B. Internal locus of control
C. Cassandra fallacy
D. Cognitive adaptability
Answer: B
Explanation: An internal locus of control is the belief that one's own actions and decisions
determine outcomes, driving entrepreneurs to take initiative rather than rely on luck.
2. After receiving harsh feedback on her startup pitch, Sarah immediately signs up for a
finance workshop to close her knowledge gap, believing she can learn the necessary skills.
Carol Dweck would classify this response as:
A. Fixed mindset
B. Growth mindset
C. Functional fixedness
D. Planning fallacy
Answer: B
Explanation: A growth mindset is the belief that abilities can be developed through
dedication and hard work—a key driver of entrepreneurial resilience.
3. Instead of setting rigid five-year revenue targets, David evaluates his personal network,
technical skills, and available capital when founding his tech company, seeing what
venture naturally emerges. This approach is called:
A. Causal reasoning
B. Planned abandonment
C. Effectuation
D. Reverse innovation
Answer: C
Explanation: Effectuation theory holds that expert entrepreneurs start with available means
and let goals emerge over time, rather than starting with predetermined goals.
, 2
4. Elena's medical device startup has been rejected by investors twenty times, yet she
continues refining her prototype and pitch with unwavering passion. Angela Duckworth
would identify this trait as:
A. Entrepreneurial alertness
B. Ambiguity tolerance
C. Overconfidence bias
D. Grit
Answer: D
Explanation: Grit is defined as passion and perseverance for long-term goals, enabling
entrepreneurs to persist through repeated failure.
5. An entrepreneur identifies a fatal flaw in a competitor's product that will cause
regulatory failure, but when he warns the market, no one believes him until the failure
actually occurs. This scenario illustrates:
A. Cassandra fallacy
B. Planning fallacy
C. Confirmation bias
D. Anchoring effect
Answer: A
Explanation: The Cassandra fallacy occurs when an entrepreneur correctly foresees a future
problem or market shift but is ignored by others until the event actually happens.
6. What does "tolerance for ambiguity" mean for an entrepreneur?
A. Preferring to work alone
B. Being able to function effectively without having all the answers or certainty about
outcomes
C. Relying on data analysis for every decision
D. Avoiding all risk
Answer: B
Explanation: Tolerance for ambiguity means entrepreneurs can make decisions and take
action in environments where information is incomplete and outcomes are unpredictable.
7. Which cognitive bias causes entrepreneurs to overestimate their probability of success
and underestimate their probability of failure?
A. Confirmation bias
B. Hindsight bias
C. Overconfidence bias
D. Anchoring bias
, 3
Answer: C
Explanation: Overconfidence bias leads entrepreneurs to overestimate their abilities and
control over outcomes. While optimism is necessary, unchecked overconfidence is a major
cause of venture failure.
8. "Cognitive adaptability" refers to an entrepreneur's ability to:
A. Memorize complex business models
B. Be dynamic, flexible, and self-regulating in thinking processes
C. Adapt products to different physical environments
D. Defeat competitors through aggressive marketing
Answer: B
Explanation: Cognitive adaptability enables entrepreneurs to pivot, question assumptions,
and learn quickly from mistakes.
9. In contrast to causal reasoning, effectuation begins with:
A. A specific goal, then searching for resources to achieve it
B. A detailed five-year business plan
C. The means one possesses (who I am, what I know, whom I know), then imagining possible
outcomes
D. A focus on eliminating all competition
Answer: C
Explanation: Sarasvathy's effectuation theory argues that expert entrepreneurs start from
the "bird in hand" logic (means-driven) rather than predictive logic (goal-driven).
10. The theory of entrepreneurial alertness (Israel Kirzner) suggests that entrepreneurs:
A. Wait for market reports to identify opportunities
B. Have a unique ability to notice opportunities others overlook
C. Only succeed in high-tech industries
D. Must have a formal business education
Answer: B
Explanation: Entrepreneurial alertness is a heightened sensitivity to unnoticed opportunities
in the environment.
11. A person starts a business because they feel frustrated by limited advancement at their
current company. This is an example of which motivation?
A. Pull motivation
B. Push motivation
C. Effectuation
D. Market-driven opportunity
