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BAEP 450 Midterm Questions and Correct
Answers
Entrepreneurship Definition 1 Ans: the pursuit of opportunity
without regard to the resources CURRENTLY under control
Entrepreneurship Definition 2 Ans: Entrepreneurship starts with
the individual.
WHO I AM, WHAT I KNOW, WHOOM I KNOW: Effectuation.
All Business Equation Ans: Profit= revenues-costs
Entrepreneurial Reasoning Ans: effective Reasoning, imagining
possible new ends using a given set of means
Contribution Margin= Ans: revenue per unit - variable costs per
unit
Break Even (in units per month) Ans: = Fixed Costs / Contribution
Margin
Net Profit Before Taxes= Ans: Units Sold After Break Even x
Contribution Margin
slotting fees Ans: fees manufacturers pay to get shelf space for
their products
© 2025 All rights reserved
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Long vs Short Production Cycles Ans: Long: Pharmaceutical,
complex products, huge amounts of capital poured in before
returns realized
Short: Fast Food, relatively easy to launch a product and make a
return quickly, not a capital intensive business in comparison to
pharma
Service vs Product Businesses Ans: Service: nail salon
Product: nail polish
To expand either add product to service e.i. get nails done and buy
polish at salon.
patent: Ans: is a set of exclusive rights granted by a state to an
inventor or his assignee for a fixed period of time in exchange for
a disclosure of an invention.
Design Patent Ans: a patent that offers protection for the way a
product looks
Utility Patent Ans: a patent that protects the functionality of the
invention
copyright Ans: gives the creator of an original work exclusive
rights to it, usually for a limited time. Copyright may apply to a
wide range of creative, intellectual, or artistic forms, or "works".
© 2025 All rights reserved
BAEP 450 Midterm Questions and Correct
Answers
Entrepreneurship Definition 1 Ans: the pursuit of opportunity
without regard to the resources CURRENTLY under control
Entrepreneurship Definition 2 Ans: Entrepreneurship starts with
the individual.
WHO I AM, WHAT I KNOW, WHOOM I KNOW: Effectuation.
All Business Equation Ans: Profit= revenues-costs
Entrepreneurial Reasoning Ans: effective Reasoning, imagining
possible new ends using a given set of means
Contribution Margin= Ans: revenue per unit - variable costs per
unit
Break Even (in units per month) Ans: = Fixed Costs / Contribution
Margin
Net Profit Before Taxes= Ans: Units Sold After Break Even x
Contribution Margin
slotting fees Ans: fees manufacturers pay to get shelf space for
their products
© 2025 All rights reserved
, 2 | Page
Long vs Short Production Cycles Ans: Long: Pharmaceutical,
complex products, huge amounts of capital poured in before
returns realized
Short: Fast Food, relatively easy to launch a product and make a
return quickly, not a capital intensive business in comparison to
pharma
Service vs Product Businesses Ans: Service: nail salon
Product: nail polish
To expand either add product to service e.i. get nails done and buy
polish at salon.
patent: Ans: is a set of exclusive rights granted by a state to an
inventor or his assignee for a fixed period of time in exchange for
a disclosure of an invention.
Design Patent Ans: a patent that offers protection for the way a
product looks
Utility Patent Ans: a patent that protects the functionality of the
invention
copyright Ans: gives the creator of an original work exclusive
rights to it, usually for a limited time. Copyright may apply to a
wide range of creative, intellectual, or artistic forms, or "works".
© 2025 All rights reserved
