, Chapter 01
Starting Your Small Business
Multiple Choice Questions
1. Which of the following is a major reason for the increased interest in small business?
A. There is no major fear of being impacted by
recession.
B. There is a growing trend toward self-
employment.
C. The rate of profit achieved by small businesses is higher than that of big
corporations.
D. There are very few government regulations and paperwork for small
businesses.
2. Which of the following statements is true about the impact of small businesses and
entrepreneurship on educational institutions?
A. Entrepreneurship and small business management are accepted as academically
respected disciplines by many high schools, colleges, and universities.
B. Community colleges are reluctant to offer courses for small
business owners.
C. Today more students think working for big corporations is a safer haven than self-
employment.
D. Educational institutions have discovered that by teaching entrepreneurship they
will be able to put a restriction on free enterprise.
3. Which of the following statements is true about small businesses?
A. The manager usually owns the
business.
B. The area of operations is not necessarily local, although the market is
primarily local.
C. Capital is supplied and ownership is held by a large number of
individuals.
D. Management of small businesses is highly dependent, because the businesses are
owned by a group of people.
1-1
Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw-Hill Education.
,4. Which of the following features must a business have to be classified as small?
A. Management is independent, and the area of operation is
primarily local.
B. It is dominant in its field of operation, and it employs 100-
200 people.
C. Ownership is held by a large group of people, and the market is
primarily local.
D. Capital is provided by a federal institution, and the objectives are non-profitability
and service to the government.
5. A _____ is any business that is independently owned and operated and is not
dominant in its field of operation.
A. monopolistic
organization
B. public
enterprise
C. close
corporation
D. small
business
6. An entrepreneurial venture is characterized by:
A. innovative strategic practices and/or
products.
B. independent ownership and operation and no desire for dominance
in its field.
C. no scope of growing large, and the owners may not
want it to.
D. normal sales, profits, and growth as opposed to rapid growth and a
quick sellout.
7. Which of the following is characteristic of a small business owner?
A. Is innovative and focuses primarily on profitability
and growth
B. Perceives the business as being an extension of his or her
personality
C. Starts and manages a business for many reasons other than furthering
personal goals
D. Prefers a less relaxed and more aggressive approach to running the
business
1-2
Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw-Hill Education.
, 8. Smaller firms tend to:
A. minimize innovation and
flexibility.
B. not provide a comprehensive learning experience to their
employees.
C. keep larger firms
competitive.
D. provide reduced employee job
satisfaction.
9. Which of the following best describes one of the contributions of small businesses?
A. They are sources of new ideas or services that larger businesses may be unable
to provide.
B. They provide large capital gains to the
owners.
C. Their products and services are sold at prices that are lower than large
businesses' prices.
D. They provide economies of scale that large businesses
cannot match.
10. Which of the following statements is true about small businesses?
A. They get easy financing that leads to too many choices for
funding.
B. Small businesses provide low employee job satisfaction owing to a lower volume of
transactions.
C. They are not subject to burdensome government regulations and
paperwork.
D. Inadequate management in small businesses creates problems for small business
owners and entrepreneurs.
11. Which of the following is a problem faced by small businesses today?
A. Lack of
advertising
B. Lack of risk
takers
C. No training at colleges and
universities
D. Unexpected growth and financing
issues
1-3
Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw-Hill Education.
Starting Your Small Business
Multiple Choice Questions
1. Which of the following is a major reason for the increased interest in small business?
A. There is no major fear of being impacted by
recession.
B. There is a growing trend toward self-
employment.
C. The rate of profit achieved by small businesses is higher than that of big
corporations.
D. There are very few government regulations and paperwork for small
businesses.
2. Which of the following statements is true about the impact of small businesses and
entrepreneurship on educational institutions?
A. Entrepreneurship and small business management are accepted as academically
respected disciplines by many high schools, colleges, and universities.
B. Community colleges are reluctant to offer courses for small
business owners.
C. Today more students think working for big corporations is a safer haven than self-
employment.
D. Educational institutions have discovered that by teaching entrepreneurship they
will be able to put a restriction on free enterprise.
3. Which of the following statements is true about small businesses?
A. The manager usually owns the
business.
B. The area of operations is not necessarily local, although the market is
primarily local.
C. Capital is supplied and ownership is held by a large number of
individuals.
D. Management of small businesses is highly dependent, because the businesses are
owned by a group of people.
1-1
Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw-Hill Education.
,4. Which of the following features must a business have to be classified as small?
A. Management is independent, and the area of operation is
primarily local.
B. It is dominant in its field of operation, and it employs 100-
200 people.
C. Ownership is held by a large group of people, and the market is
primarily local.
D. Capital is provided by a federal institution, and the objectives are non-profitability
and service to the government.
5. A _____ is any business that is independently owned and operated and is not
dominant in its field of operation.
A. monopolistic
organization
B. public
enterprise
C. close
corporation
D. small
business
6. An entrepreneurial venture is characterized by:
A. innovative strategic practices and/or
products.
B. independent ownership and operation and no desire for dominance
in its field.
C. no scope of growing large, and the owners may not
want it to.
D. normal sales, profits, and growth as opposed to rapid growth and a
quick sellout.
7. Which of the following is characteristic of a small business owner?
A. Is innovative and focuses primarily on profitability
and growth
B. Perceives the business as being an extension of his or her
personality
C. Starts and manages a business for many reasons other than furthering
personal goals
D. Prefers a less relaxed and more aggressive approach to running the
business
1-2
Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw-Hill Education.
, 8. Smaller firms tend to:
A. minimize innovation and
flexibility.
B. not provide a comprehensive learning experience to their
employees.
C. keep larger firms
competitive.
D. provide reduced employee job
satisfaction.
9. Which of the following best describes one of the contributions of small businesses?
A. They are sources of new ideas or services that larger businesses may be unable
to provide.
B. They provide large capital gains to the
owners.
C. Their products and services are sold at prices that are lower than large
businesses' prices.
D. They provide economies of scale that large businesses
cannot match.
10. Which of the following statements is true about small businesses?
A. They get easy financing that leads to too many choices for
funding.
B. Small businesses provide low employee job satisfaction owing to a lower volume of
transactions.
C. They are not subject to burdensome government regulations and
paperwork.
D. Inadequate management in small businesses creates problems for small business
owners and entrepreneurs.
11. Which of the following is a problem faced by small businesses today?
A. Lack of
advertising
B. Lack of risk
takers
C. No training at colleges and
universities
D. Unexpected growth and financing
issues
1-3
Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw-Hill Education.
