EEE 457 – MIDTERM PRACTICE TEST
QUESTIONS WITH CORRECT
ANSWERS
Market Segmentation - Answer-Dividing a market into subsets with shared
characteristics or behaviors.
Target Market - Answer-The most promising segment(s) identified for entry.
Porter's Five Forces - Answer-Framework for analyzing industry structure: Rivalry, New
Entrants, Substitutes, Buyer Power, Supplier Power.
Operating Leverage (O/L) - Answer-Ratio of fixed costs to total costs; higher leverage
increases risk and potential return.
Fixed Costs - Answer-Costs that remain constant regardless of production volume.
Variable Costs - Answer-Costs that change in direct proportion to sales or production.
Contribution Margin (CM) - Answer-Price per unit minus variable cost per unit.
Breakeven Volume (BEV) - Answer-Fixed Costs ÷ Contribution Margin.
Financial Leverage - Answer-Using debt to amplify potential returns (and risks).
Guerrilla Marketing - Answer-Unconventional, creative, low-cost marketing relying on
personal relationships and flexibility.
4 Ps of Marketing - Answer-Product, Price, Place, Promotion.
4 Cs of Marketing - Answer-Customer needs, Cost, Convenience, Communication.
4 Ws of Marketing - Answer-Wealth (economic), Wellness (environmental), Well-being
(social), Wisdom (human).
Customer Orientation - Answer-Designing products and strategies starting from
customer needs.
Sole Proprietorship - Answer-Business owned by one person; unlimited liability; taxed
once as personal income.
General Partnership - Answer-Two or more owners sharing profits and unlimited liability.
, Limited Liability Company (LLC) - Answer-Combines partnership flexibility with
corporate protection; taxed once.
C-Corporation - Answer-Separate legal entity; limited liability; double taxation; multiple
shareholders allowed.
S-Corporation - Answer-Pass-through taxation; limited to 100 shareholders; one stock
class; U.S. citizens only.
BAIL Team - Answer-Banker, Accountant, Insurance, Lawyer—key professional
advisors.
Intellectual Property (IP) - Answer-Legal rights protecting innovations (patents,
trademarks, copyrights, trade secrets).
Patent - Answer-Grants exclusive rights to make or sell an invention for a limited period.
Trademark - Answer-Symbol, name, or logo identifying a business or product.
Copyright - Answer-Protects original creative works.
Trade Secret - Answer-Confidential information giving a business competitive
advantage.
Design & Development - Answer-Planning, testing, and refining a product before market
launch.
Minimum Viable Product (MVP) - Answer-Simplest version of a product demonstrating
concept viability.
Operations - Answer-The processes involved in producing and delivering goods or
services.
Operations Strategy - Answer-Determining what operational competencies matter most
to the target market.
Operations Value Curve - Answer-Maps operational performance features relative to
customer priorities.
Management Team - Answer-Founders and executives responsible for venture
execution.
Board of Directors - Answer-5-7 experienced advisors providing oversight and
legitimacy.
QUESTIONS WITH CORRECT
ANSWERS
Market Segmentation - Answer-Dividing a market into subsets with shared
characteristics or behaviors.
Target Market - Answer-The most promising segment(s) identified for entry.
Porter's Five Forces - Answer-Framework for analyzing industry structure: Rivalry, New
Entrants, Substitutes, Buyer Power, Supplier Power.
Operating Leverage (O/L) - Answer-Ratio of fixed costs to total costs; higher leverage
increases risk and potential return.
Fixed Costs - Answer-Costs that remain constant regardless of production volume.
Variable Costs - Answer-Costs that change in direct proportion to sales or production.
Contribution Margin (CM) - Answer-Price per unit minus variable cost per unit.
Breakeven Volume (BEV) - Answer-Fixed Costs ÷ Contribution Margin.
Financial Leverage - Answer-Using debt to amplify potential returns (and risks).
Guerrilla Marketing - Answer-Unconventional, creative, low-cost marketing relying on
personal relationships and flexibility.
4 Ps of Marketing - Answer-Product, Price, Place, Promotion.
4 Cs of Marketing - Answer-Customer needs, Cost, Convenience, Communication.
4 Ws of Marketing - Answer-Wealth (economic), Wellness (environmental), Well-being
(social), Wisdom (human).
Customer Orientation - Answer-Designing products and strategies starting from
customer needs.
Sole Proprietorship - Answer-Business owned by one person; unlimited liability; taxed
once as personal income.
General Partnership - Answer-Two or more owners sharing profits and unlimited liability.
, Limited Liability Company (LLC) - Answer-Combines partnership flexibility with
corporate protection; taxed once.
C-Corporation - Answer-Separate legal entity; limited liability; double taxation; multiple
shareholders allowed.
S-Corporation - Answer-Pass-through taxation; limited to 100 shareholders; one stock
class; U.S. citizens only.
BAIL Team - Answer-Banker, Accountant, Insurance, Lawyer—key professional
advisors.
Intellectual Property (IP) - Answer-Legal rights protecting innovations (patents,
trademarks, copyrights, trade secrets).
Patent - Answer-Grants exclusive rights to make or sell an invention for a limited period.
Trademark - Answer-Symbol, name, or logo identifying a business or product.
Copyright - Answer-Protects original creative works.
Trade Secret - Answer-Confidential information giving a business competitive
advantage.
Design & Development - Answer-Planning, testing, and refining a product before market
launch.
Minimum Viable Product (MVP) - Answer-Simplest version of a product demonstrating
concept viability.
Operations - Answer-The processes involved in producing and delivering goods or
services.
Operations Strategy - Answer-Determining what operational competencies matter most
to the target market.
Operations Value Curve - Answer-Maps operational performance features relative to
customer priorities.
Management Team - Answer-Founders and executives responsible for venture
execution.
Board of Directors - Answer-5-7 experienced advisors providing oversight and
legitimacy.
