1. _____ refers to the way entrepreneurs identify new products or services that may lead to
promising businesses.
a. Focus-based decisions
b. Elasticity
c. Opportunity recognition
d. Cost-benefit analysis
ANSWER: c
2. Katarina has founded three different businesses in the past eight years, all of which have
become so successful she has sold them at large profits. We can say Katarina is good at:
a. innovative ideas. b. entrepreneurial alertness.
c. new market ideas. d. opportunity recognition.
ANSWER: d
3. Israel Kirzner believes entrepreneurs have a unique capability, which he calls _________
________, to spot existing opportunities for businesses.
a. innovative thinking b. market awareness
c. entrepreneurial alertness d. opportunity recognition
ANSWER: c
4. A computer technician recognizing a need for more aesthetically pleasing computers would be
said to have entrepreneurial _____.
a. technology
b. alertness
c. strategy
d. rivalry
ANSWER: b
5. Isabella listens whenever someone says “Someone ought to make a ...” She expects one of
,these ideas to develop into a profitable business. Isabella possesses:
a. market awareness. b. entrepreneurial alertness.
c. opportunity recognition. d. innovative thinking.
ANSWER: b
6. Janis wants to open a restaurant. She is not interested in a franchise; she wants to build her
business literally from the ground up. When she does, her business will be classified as a:
a. entrepreneurial opportunity. b. startup.
c. new market idea. d. serendipity.
ANSWER: b
7. Consuela noticed significant growth in the Hispanic population in her mid-size town. The
local grocery carried mostly traditional American products. She knew her neighbors would want
familiar foods so she decided to open a food market catering to their preferences. Which kind of
startup will her store be?
a. New market idea b. New technology idea
c. New benefit idea d. New product idea
ANSWER: a
8. When Jeff Bezos launched Amazon.com, his idea of selling items he did not own from a
website was unique. Which type of startup is this?
a. New market idea b. New technology idea
c. New benefit idea d. New product idea
ANSWER: b
9. According to a study by the National Federation of Independent Business, the most common
source of new product ideas for small business startups is
a. prior work experience.
b. personal interests and hobbies.
, c. a chance happening.
d. existing records of a business.
ANSWER: a
10. Jeff Bezos’ original business plan involved taking orders for books and having the items
shipped directly from the publisher to the customer. He modified the plan to include other
products such as toys and decided to buy the toys from the producers and ship them from his own
warehouse. This modification of the original plan is called:
a. a change of plan b. a pivot.
c. a serendipity. d. a competitive move.
ANSWER: b
11. Laura discovered to her amazement that the skin oil she sold seemed to repel mosquitos. She
relabeled the product and began selling it as alternative to brands such as Cutter and
Off!. Laura’s startup is which kind?
a. New market idea b. New technology idea
c. New benefit idea d. New product idea
ANSWER: c
12. Verlin worked in a cabinet shop until he became frustrated that his ideas for improving
efficiency were falling on deaf ears. So he left and started his own cabinet shop where he could
implement those ideas. From which source did his ideas for his startup come?
a. From hobbies b. From personal interests
c. From accidental discovery d. From work experience
ANSWER: d
13. An example of an idea for a new startup from a hobby is
a. a coin collector, who bought and sold coins for years to build a personal collection,
deciding to become a coin dealer.
b. a furniture salesperson seeing the possibility of opening a new furniture store in a
different area of the city.
, c. a sharpshooter, who shot holes in a pair of her boyfriend's jeans during an argument,
hearing him get complimented on the way they look.
d. all of the above are examples.
ANSWER: a
14. Carol enjoyed yarn crafts but there were no yarn shops in her small town. She reasoned that
there were many others nearby who might appreciate being able to purchase yarns and supplies
without a long drive. Within a year her shop was profitable and expanding into larger space.
Which of these statements best describes this situation?
a. Carol grew a business out of her b. Carol turned her hobby into a thriving
personal experience. business.
c. Carol accidentally stumbled upon a d. Carol used her work experience as a
gold mine. source of startup ideas.
ANSWER: b
15. Wilma needed wine glasses but all she had were candlestick holders and 8-ounce canning
jars. Gluing the two together, she created what she called “mountain crystal” which became a big
hit. The local crafters’ association asked her to make enough for them to sell, and her business
took off. This is an example of building a business from:
a. work experience. b. hobbies.
c. personal interest. d. accidental discovery.
ANSWER: d
16. An example of an idea for a new startup from an accidental discovery is
a. a coin collector, who bought and sold coins for years to build a personal collection,
deciding to become a coin dealer.
b. a furniture salesperson seeing the possibility of opening a new furniture store in a
different area of the city.
c. a sharpshooter, who shot holes in a pair of her boyfriend's jeans during an argument,
hearing him get complimented on the way they look.
d. all of the above are examples.
ANSWER: c
17. The quote “Good artists borrow; great artists steal” is the principle that launched which
promising businesses.
a. Focus-based decisions
b. Elasticity
c. Opportunity recognition
d. Cost-benefit analysis
ANSWER: c
2. Katarina has founded three different businesses in the past eight years, all of which have
become so successful she has sold them at large profits. We can say Katarina is good at:
a. innovative ideas. b. entrepreneurial alertness.
c. new market ideas. d. opportunity recognition.
ANSWER: d
3. Israel Kirzner believes entrepreneurs have a unique capability, which he calls _________
________, to spot existing opportunities for businesses.
a. innovative thinking b. market awareness
c. entrepreneurial alertness d. opportunity recognition
ANSWER: c
4. A computer technician recognizing a need for more aesthetically pleasing computers would be
said to have entrepreneurial _____.
a. technology
b. alertness
c. strategy
d. rivalry
ANSWER: b
5. Isabella listens whenever someone says “Someone ought to make a ...” She expects one of
,these ideas to develop into a profitable business. Isabella possesses:
a. market awareness. b. entrepreneurial alertness.
c. opportunity recognition. d. innovative thinking.
ANSWER: b
6. Janis wants to open a restaurant. She is not interested in a franchise; she wants to build her
business literally from the ground up. When she does, her business will be classified as a:
a. entrepreneurial opportunity. b. startup.
c. new market idea. d. serendipity.
ANSWER: b
7. Consuela noticed significant growth in the Hispanic population in her mid-size town. The
local grocery carried mostly traditional American products. She knew her neighbors would want
familiar foods so she decided to open a food market catering to their preferences. Which kind of
startup will her store be?
a. New market idea b. New technology idea
c. New benefit idea d. New product idea
ANSWER: a
8. When Jeff Bezos launched Amazon.com, his idea of selling items he did not own from a
website was unique. Which type of startup is this?
a. New market idea b. New technology idea
c. New benefit idea d. New product idea
ANSWER: b
9. According to a study by the National Federation of Independent Business, the most common
source of new product ideas for small business startups is
a. prior work experience.
b. personal interests and hobbies.
, c. a chance happening.
d. existing records of a business.
ANSWER: a
10. Jeff Bezos’ original business plan involved taking orders for books and having the items
shipped directly from the publisher to the customer. He modified the plan to include other
products such as toys and decided to buy the toys from the producers and ship them from his own
warehouse. This modification of the original plan is called:
a. a change of plan b. a pivot.
c. a serendipity. d. a competitive move.
ANSWER: b
11. Laura discovered to her amazement that the skin oil she sold seemed to repel mosquitos. She
relabeled the product and began selling it as alternative to brands such as Cutter and
Off!. Laura’s startup is which kind?
a. New market idea b. New technology idea
c. New benefit idea d. New product idea
ANSWER: c
12. Verlin worked in a cabinet shop until he became frustrated that his ideas for improving
efficiency were falling on deaf ears. So he left and started his own cabinet shop where he could
implement those ideas. From which source did his ideas for his startup come?
a. From hobbies b. From personal interests
c. From accidental discovery d. From work experience
ANSWER: d
13. An example of an idea for a new startup from a hobby is
a. a coin collector, who bought and sold coins for years to build a personal collection,
deciding to become a coin dealer.
b. a furniture salesperson seeing the possibility of opening a new furniture store in a
different area of the city.
, c. a sharpshooter, who shot holes in a pair of her boyfriend's jeans during an argument,
hearing him get complimented on the way they look.
d. all of the above are examples.
ANSWER: a
14. Carol enjoyed yarn crafts but there were no yarn shops in her small town. She reasoned that
there were many others nearby who might appreciate being able to purchase yarns and supplies
without a long drive. Within a year her shop was profitable and expanding into larger space.
Which of these statements best describes this situation?
a. Carol grew a business out of her b. Carol turned her hobby into a thriving
personal experience. business.
c. Carol accidentally stumbled upon a d. Carol used her work experience as a
gold mine. source of startup ideas.
ANSWER: b
15. Wilma needed wine glasses but all she had were candlestick holders and 8-ounce canning
jars. Gluing the two together, she created what she called “mountain crystal” which became a big
hit. The local crafters’ association asked her to make enough for them to sell, and her business
took off. This is an example of building a business from:
a. work experience. b. hobbies.
c. personal interest. d. accidental discovery.
ANSWER: d
16. An example of an idea for a new startup from an accidental discovery is
a. a coin collector, who bought and sold coins for years to build a personal collection,
deciding to become a coin dealer.
b. a furniture salesperson seeing the possibility of opening a new furniture store in a
different area of the city.
c. a sharpshooter, who shot holes in a pair of her boyfriend's jeans during an argument,
hearing him get complimented on the way they look.
d. all of the above are examples.
ANSWER: c
17. The quote “Good artists borrow; great artists steal” is the principle that launched which
