ENTR 321 MIDTERM QUESTIONS AND VERIFIED
ANSWERS
Commitment, determination, and perseverance are the only characteristics one needs
to become a successful entrepreneur. (T/F) - Answers - False
The macro view of entrepreneurship looks at factors that are specific to the individual
entrepreneur. (T/F) - Answers - False
The word entrepreneur is derived from the French entreprendre, which is translated as
"to assume the risk". (T/F) - Answers - False (it translates as "to undertake, to start)
The entrepreneurial spirit is not unique to America and Western Europe. It can be found
in nearly every part of the world. (T/F) - Answers - True
Firms do not need to alter management techniques to encourage corporate
entrepreneurship since it tends to occur naturally. (T/F) - Answers - False
One reason that corporate entrepreneurship's become popular is because it allows
corporations to tap the innovative talents of the personnel. (T/F) - Answers - True
Creativity cannot be developed or improved. (T/F) - Answers - False
Incubation in the creative process often occurs when the individual is doing something
completely unrelated to the subject. (T/F) - Answers - True
Social entrepreneurs are known to form ventures that exploit opportunities to create
social value. (T/F) - Answers - False
Feasibility analyses includes technical, market, financial organizational, and competitive
analyses. (T/F) - Answers - True
Timing has little to do with the success or failure of a new venture. (T/F) - Answers -
False
Pricing becomes less of a concern when customers become aware of a product's
unique characteristics that are superior to the competition. (T/F) - Answers - True
Equity financing is money invested in the venture with a legal obligation to repay the
principal amount with accrued interest. (T/F) - Answers - False
Generally, the larger and more successful the franchisor, the greater the franchise fee
that is charged. (T/F) - Answers - True
, In negotiating a deal to purchase an existing business, it is a bad idea to ask the seller
to retain a minority interest in the firm. (T/F) - Answers - False
Joseph Schumpeter wrote about a process of entrepreneurial innovation that he learned
"creative destruction". Which of the following most closely describes the potential
economic effect of the types of innovations Schumpeter was talking about?
a) Entrepreneurial arbitrage
b) Shifting the production possibilities frontier by meeting more needs with the same
amount of resources
c) Changing the distribution of wealth as described by Pareto's power law
d) Moving supply and demand towards equilibrium - Answers - b) Shifting the
production possibilities frontier by meeting more needs with the same amount of
resources
Which of the following was the first to note the role of entrepreneurs in organizing the
"factors of production" and shifting them to more profitable opportunities?
a) Richard Cantillion
b) Vilfredo Pareto
c) Jean Baptiste Say
d) Stevenson & Carlos - Answers - c) Jean Baptiste Say
In the most developed economies, capital goods and automation have taken the place
of manual labor -- or makes it more efficient -- and knowledge has become increasingly
important. Entrepreneurship in these countries typically contributes to which type of
economic growth?
a) Factor-driven economic development
b) Efficiency-driven economic development
c) Innovation-driven economic development
d) Opportunity-driven entrepreneurship - Answers - c) Innovation-driven economic
development
The process approach to entrepreneurship seeks to
a) explain why and how an individual chooses to pursue an opportunity
b) explain the process of obtaining patents
c) explain intrapreneurship
d) explain the process of obtaining venture capital - Answers - a) explain why and how
an individual chooses to pursue an opportunity
The decision to behave entrepreneurially is the result of the interaction of:
a) a new market and new technology
b) the relevant business environment and consumer trends
c) the existence of a viable business idea and availability of startup capital
d) the individual's personal entrepreneurial mind-set and an opportunity - Answers - d)
the individual's personal entrepreneurial mind-set and an opportunity
ANSWERS
Commitment, determination, and perseverance are the only characteristics one needs
to become a successful entrepreneur. (T/F) - Answers - False
The macro view of entrepreneurship looks at factors that are specific to the individual
entrepreneur. (T/F) - Answers - False
The word entrepreneur is derived from the French entreprendre, which is translated as
"to assume the risk". (T/F) - Answers - False (it translates as "to undertake, to start)
The entrepreneurial spirit is not unique to America and Western Europe. It can be found
in nearly every part of the world. (T/F) - Answers - True
Firms do not need to alter management techniques to encourage corporate
entrepreneurship since it tends to occur naturally. (T/F) - Answers - False
One reason that corporate entrepreneurship's become popular is because it allows
corporations to tap the innovative talents of the personnel. (T/F) - Answers - True
Creativity cannot be developed or improved. (T/F) - Answers - False
Incubation in the creative process often occurs when the individual is doing something
completely unrelated to the subject. (T/F) - Answers - True
Social entrepreneurs are known to form ventures that exploit opportunities to create
social value. (T/F) - Answers - False
Feasibility analyses includes technical, market, financial organizational, and competitive
analyses. (T/F) - Answers - True
Timing has little to do with the success or failure of a new venture. (T/F) - Answers -
False
Pricing becomes less of a concern when customers become aware of a product's
unique characteristics that are superior to the competition. (T/F) - Answers - True
Equity financing is money invested in the venture with a legal obligation to repay the
principal amount with accrued interest. (T/F) - Answers - False
Generally, the larger and more successful the franchisor, the greater the franchise fee
that is charged. (T/F) - Answers - True
, In negotiating a deal to purchase an existing business, it is a bad idea to ask the seller
to retain a minority interest in the firm. (T/F) - Answers - False
Joseph Schumpeter wrote about a process of entrepreneurial innovation that he learned
"creative destruction". Which of the following most closely describes the potential
economic effect of the types of innovations Schumpeter was talking about?
a) Entrepreneurial arbitrage
b) Shifting the production possibilities frontier by meeting more needs with the same
amount of resources
c) Changing the distribution of wealth as described by Pareto's power law
d) Moving supply and demand towards equilibrium - Answers - b) Shifting the
production possibilities frontier by meeting more needs with the same amount of
resources
Which of the following was the first to note the role of entrepreneurs in organizing the
"factors of production" and shifting them to more profitable opportunities?
a) Richard Cantillion
b) Vilfredo Pareto
c) Jean Baptiste Say
d) Stevenson & Carlos - Answers - c) Jean Baptiste Say
In the most developed economies, capital goods and automation have taken the place
of manual labor -- or makes it more efficient -- and knowledge has become increasingly
important. Entrepreneurship in these countries typically contributes to which type of
economic growth?
a) Factor-driven economic development
b) Efficiency-driven economic development
c) Innovation-driven economic development
d) Opportunity-driven entrepreneurship - Answers - c) Innovation-driven economic
development
The process approach to entrepreneurship seeks to
a) explain why and how an individual chooses to pursue an opportunity
b) explain the process of obtaining patents
c) explain intrapreneurship
d) explain the process of obtaining venture capital - Answers - a) explain why and how
an individual chooses to pursue an opportunity
The decision to behave entrepreneurially is the result of the interaction of:
a) a new market and new technology
b) the relevant business environment and consumer trends
c) the existence of a viable business idea and availability of startup capital
d) the individual's personal entrepreneurial mind-set and an opportunity - Answers - d)
the individual's personal entrepreneurial mind-set and an opportunity
