Chapter 1—The Entrepreneurial Life
TRUE/FALSE
1. An entrepreneurial career can provide an exciting life and substantial personal rewards while also
contributing to the welfare of society.
ANS: T PTS: 1 REF: p. 3 OBJ: 1-1 TYPE: C
2. Guderian saw lots of competition for parts for old cars, but started a business anyways
because it was his passion.
ANS: F PTS: 1 REF: P. 4 OBJ: 1-1 TYPE A
3. Sara Blakely founded SPANX by designing an improved pantyhose and building a
business on that platform.
ANS: T PTS: 1 REF: p. 5 OBJ: 2-1 TYPE: A
4. Moore and Powell developed a monitoring system that allowed doctor to better meet
needs of expectant mothers
ANS: T PTS: 1 REF: p. 5 OBJ: 2-1 TYPE: A
5. The term entrepreneur is understood in this text to refer only to founders of small businesses.
ANS: F
According to the text, entrepreneur refers to founders, franchisees, second-generation members
of family-owned firms, and owner-managers who buy out the founders of existing firms.
PTS: 1 REF: p. 6 OBJ: 1-2 TYPE: D
6. The terms founder and entrepreneur are mutually exclusive.
, ANS: F
According to the definition in the text, founders are considered to be entrepreneurs.
PTS: 1 REF: p. 12 OBJ: 1-2 TYPE: D
7. An owner-manager is a person who founds a new business.
ANS: F
An owner-manager may be an individual who bought out the founder(s) of an existing firm (or
later owners) and thus is not necessarily the one who started the firm.
PTS: 1 REF: p. 6 OBJ: 1-2 TYPE: D
8. According to the definition of entrepreneur given in Chapter 1, owner-managers who buy out
founders of existing firms may be classified as entrepreneurs.
ANS: T PTS: 1 REF: p. 6 OBJ: 1-2 TYPE: D
9. The universally accepted definition of the term small business is based on the number of people
employed by the firm.
ANS: F
There have been a number of attempts to define the term small business, using such criteria as the
number of employees, sales volume, and value of assets, but there is no universally accepted
definition.
PTS: 1 REF: p. 7 OBJ: 1-2 TYPE: D
10. Three primary rewards of entrepreneurship are thought to be profit, independence, and personal
fulfillment.
ANS: T PTS: 1 REF: p. 8-9 OBJ: 1-3 TYPE: C
,11. Some estimate that entrepreneurs are four times more likely to be millionaires than are those who
work for others.
ANS: T PTS: 1 REF: p. 9 OBJ: 1-3 TYPE: C
12. Most startups are initiated by entrepreneurs who have visions of getting rich.
ANS: F
Most startups are initiated by entrepreneurs who are satisfied with that which they consider to be
a reasonable profit from their ventures.
PTS: 1 REF: p. 9 OBJ: 1-3 TYPE: C
13. A large percentage of small business owners cite their desire to be their own boss as the main
reason they left their previous employers.
ANS: T PTS: 1 REF: p. 9 OBJ: 1-3 TYPE: C
14. Persons who leave their homeland and go into business for themselves in a new country would be
described as entrepreneurial refugees.
ANS: T PTS: 1 REF: p. 10 OBJ: 1-3 TYPE: D
15. A refugee is a person who tried entrepreneurship, failed, and sought refuge in corporate
employment.
ANS: F
A refugee is an individual who has left an undesirable environment by going into business for
him/herself.
PTS: 1 REF: p. 10 OBJ: 1-3 TYPE: D
16. Being an entrepreneur can often bring a sense of dignity or significance that makes life worth
living.
, ANS: T PTS: 1 REF: p. 10 OBJ: 1-3 TYPE: C
17. “Second-stage” entrepreneurs are entrepreneurs who take over the operations of a successful
ongoing business from its founder.
ANS: T PTS: 1 REF: p. 12 OBJ: 1-4 TYPE: D
18. Entrepreneurial teams are formed by bringing together two or more persons who together
function as entrepreneurs.
ANS: T PTS: 1 REF: p. 15 OBJ: 1-4 TYPE: D
19. A mechanic who starts an independent garage can best be thought of as an opportunistic
entrepreneur.
ANS: F
This is an artisan entrepreneur-i.e., one who operates the business using his or her technical
skills as opposed to communication and managerial skills.
PTS: 1 REF: p. 13 OBJ: 1-4 TYPE: A
20. Between 1976 and 2000, women’s share of total self-employment remained fairly constant.
ANS: F
Between 1976 and 2000, women’s share of total self-employment grew from 22 percent to 38
percent.
PTS: 1 REF: p. 14 OBJ: 1-4 TYPE: C
21. Small and entrepreneurial firms cannot hold their own or gain an edge over successful, more
powerful businesses.
ANS: F
TRUE/FALSE
1. An entrepreneurial career can provide an exciting life and substantial personal rewards while also
contributing to the welfare of society.
ANS: T PTS: 1 REF: p. 3 OBJ: 1-1 TYPE: C
2. Guderian saw lots of competition for parts for old cars, but started a business anyways
because it was his passion.
ANS: F PTS: 1 REF: P. 4 OBJ: 1-1 TYPE A
3. Sara Blakely founded SPANX by designing an improved pantyhose and building a
business on that platform.
ANS: T PTS: 1 REF: p. 5 OBJ: 2-1 TYPE: A
4. Moore and Powell developed a monitoring system that allowed doctor to better meet
needs of expectant mothers
ANS: T PTS: 1 REF: p. 5 OBJ: 2-1 TYPE: A
5. The term entrepreneur is understood in this text to refer only to founders of small businesses.
ANS: F
According to the text, entrepreneur refers to founders, franchisees, second-generation members
of family-owned firms, and owner-managers who buy out the founders of existing firms.
PTS: 1 REF: p. 6 OBJ: 1-2 TYPE: D
6. The terms founder and entrepreneur are mutually exclusive.
, ANS: F
According to the definition in the text, founders are considered to be entrepreneurs.
PTS: 1 REF: p. 12 OBJ: 1-2 TYPE: D
7. An owner-manager is a person who founds a new business.
ANS: F
An owner-manager may be an individual who bought out the founder(s) of an existing firm (or
later owners) and thus is not necessarily the one who started the firm.
PTS: 1 REF: p. 6 OBJ: 1-2 TYPE: D
8. According to the definition of entrepreneur given in Chapter 1, owner-managers who buy out
founders of existing firms may be classified as entrepreneurs.
ANS: T PTS: 1 REF: p. 6 OBJ: 1-2 TYPE: D
9. The universally accepted definition of the term small business is based on the number of people
employed by the firm.
ANS: F
There have been a number of attempts to define the term small business, using such criteria as the
number of employees, sales volume, and value of assets, but there is no universally accepted
definition.
PTS: 1 REF: p. 7 OBJ: 1-2 TYPE: D
10. Three primary rewards of entrepreneurship are thought to be profit, independence, and personal
fulfillment.
ANS: T PTS: 1 REF: p. 8-9 OBJ: 1-3 TYPE: C
,11. Some estimate that entrepreneurs are four times more likely to be millionaires than are those who
work for others.
ANS: T PTS: 1 REF: p. 9 OBJ: 1-3 TYPE: C
12. Most startups are initiated by entrepreneurs who have visions of getting rich.
ANS: F
Most startups are initiated by entrepreneurs who are satisfied with that which they consider to be
a reasonable profit from their ventures.
PTS: 1 REF: p. 9 OBJ: 1-3 TYPE: C
13. A large percentage of small business owners cite their desire to be their own boss as the main
reason they left their previous employers.
ANS: T PTS: 1 REF: p. 9 OBJ: 1-3 TYPE: C
14. Persons who leave their homeland and go into business for themselves in a new country would be
described as entrepreneurial refugees.
ANS: T PTS: 1 REF: p. 10 OBJ: 1-3 TYPE: D
15. A refugee is a person who tried entrepreneurship, failed, and sought refuge in corporate
employment.
ANS: F
A refugee is an individual who has left an undesirable environment by going into business for
him/herself.
PTS: 1 REF: p. 10 OBJ: 1-3 TYPE: D
16. Being an entrepreneur can often bring a sense of dignity or significance that makes life worth
living.
, ANS: T PTS: 1 REF: p. 10 OBJ: 1-3 TYPE: C
17. “Second-stage” entrepreneurs are entrepreneurs who take over the operations of a successful
ongoing business from its founder.
ANS: T PTS: 1 REF: p. 12 OBJ: 1-4 TYPE: D
18. Entrepreneurial teams are formed by bringing together two or more persons who together
function as entrepreneurs.
ANS: T PTS: 1 REF: p. 15 OBJ: 1-4 TYPE: D
19. A mechanic who starts an independent garage can best be thought of as an opportunistic
entrepreneur.
ANS: F
This is an artisan entrepreneur-i.e., one who operates the business using his or her technical
skills as opposed to communication and managerial skills.
PTS: 1 REF: p. 13 OBJ: 1-4 TYPE: A
20. Between 1976 and 2000, women’s share of total self-employment remained fairly constant.
ANS: F
Between 1976 and 2000, women’s share of total self-employment grew from 22 percent to 38
percent.
PTS: 1 REF: p. 14 OBJ: 1-4 TYPE: C
21. Small and entrepreneurial firms cannot hold their own or gain an edge over successful, more
powerful businesses.
ANS: F
