Test Bank for Entrepreneurship: Successfully Launching New Ventures, 4/E 4th Edition Bruce R. Barringer, Duane Ireland

Entrepreneurship: Successfully Launching New Ventures, 4e (Barringer/Ireland)
Chapter 1 Introduction to Entrepreneurship

1) GiftZip, the company profiled in the opening feature for Chapter 1, makes money via:
A) payments from companies that offer gift cards for displaying their cards on the site
B) the direct sale of gift cards displayed on its site
C) monthly subscription fees
D) online advertising
E) earning an affiliate fee for gift card purchases that originate from its site
Answer: E
Diff: 2 Page Ref: 3
Topic: Introduction to Entrepreneurship
AACSB: Reflective Thinking
Objective: Describe the role of entrepreneurs and small business

2) Which of the following was not a contributing factor to GiftZip’s early success?
A) It was becoming increasingly affordable to launch an online business.
B) positive PR
C) angel investor funding
D) People were becoming increasingly comfortable buying online.
E) The gift card market was growing.
Answer: C
Diff: 1 Page Ref: 3
Topic: Introduction to Entrepreneurship
AACSB: Reflective Thinking
Objective: Describe the role of entrepreneurs and small business

3) According to the Global Entrepreneurship Monitor (GEM) 2010 survey, about ________ of adults in the United States are either starting a business or are running a business that has been in existence for less than 3 1/2 years.
A) 3.8 percent
B) 5.5 percent
C) 7.6 percent
D) 9.0 percent
E) 12.5 percent
Answer: C
Diff: 2 Page Ref: 5
Topic: Introduction to Entrepreneurship
AACSB: Reflective Thinking
Objective: Describe the role of entrepreneurs and small business
4) According to the Global Entrepreneurship Monitor (GEM) 2007 study, the majority of people in high-income countries are drawn to entrepreneurship:
A) to take advantage of an attractive opportunity
B) due to lack of career prospects
C) as a result of government incentives
D) because an important role model was an entrepreneur
E) to gain prestige
Answer: A
Diff: 2 Page Ref: 5
Topic: Introduction to Entrepreneurship
AACSB: Reflective Thinking
Objective: Describe the role of entrepreneurs and small business
5) Which of the following statements regarding business success (or failure) rates is correct?
A) After four years, 15 percent of new businesses are still open.
B) After four years, 25 percent of new businesses are still open.
C) After four years, 50 percent of new businesses are still open.
D) Two out of three businesses fail within the first four years.
E) Nine out of ten businesses fail within the first four years.
Answer: C
Diff: 3 Page Ref: 5
Topic: Introduction to Entrepreneurship
AACSB: Reflective Thinking
Objective: Describe the role of entrepreneurs and small business

6) Apple Inc. is a firm that is proactive, innovative and risk-taking. From this description, we can most accurately conclude that Apple has a high level of:
A) enterprise focus
B) innovative intensity
C) entrepreneurial intensity
D) creative intensity
E) innovative concentration
Answer: C
Diff: 2 Page Ref: 6
Topic: Introduction to Entrepreneurship
AACSB: Reflective Thinking
Objective: Describe the role of entrepreneurs and small business
7) Sarah Thorton is the founder of a company named Extreme Sports Apparel. The company makes apparel products for extreme sports enthusiasts such as rock climbers, triathletes, parasailors, and BMX bikers. Sarah wants her company to pursue a high level of corporate entrepreneurship. To achieve that goal, Sarah’s firm should be:
A) innovative, risk averse, and take a “wait and see” posture
B) taking a “wait and see” posture, innovative, and risk taking
C) proactive, not innovative, and risk taking
D) taking a “wait and see” posture, not innovative, and risk averse
E) proactive, innovative, and risk taking
Answer: E
Diff: 2 Page Ref: 6
Topic: Introduction to Entrepreneurship
AACSB: Reflective Thinking
Objective: Describe the role of entrepreneurs and small business

8) Netflix is an established firm that encourages and emphasizes entrepreneurial behavior throughout its various divisions. According to the textbook, Netflix practices:
A) tactical entrepreneurship
B) corporate entrepreneurship
C) strategic entrepreneurship
D) business entrepreneurship
E) enterprise entrepreneurship
Answer: B
Diff: 2 Page Ref: 6
Topic: Introduction to Entrepreneurship
AACSB: Reflective Thinking
Objective: Describe the role of entrepreneurs and small business
9) The three primary reasons that people become entrepreneurs and start their own firms are to:
A) gain prestige, realize financial rewards, and eliminate risk in their lives
B) do what they were “born” to do, be their own boss, and gain prestige
C) take big risks, be their own boss, and do what they were “born” to do
D) be their own boss, pursue their own ideas, and realize financial rewards
E) take advantage of government subsidies, pursue their own ideas, and realize financial rewards
Answer: D
Diff: 2 Page Ref: 7
Topic: Introduction to Entrepreneurship
AACSB: Reflective Thinking
Objective: Describe the role of entrepreneurs and small business
10) According to the textbook, the number one reason that people become entrepreneurs is to:
A) realize financial rewards
B) gain prestige
C) be their own boss
D) continue a family tradition
E) pursue their own ideas
Answer: C
Diff: 1 Page Ref: 7
Topic: Introduction to Entrepreneurship
AACSB: Reflective Thinking
Objective: Describe the role of entrepreneurs and small business

11) James Quinn is starting a firm in the financial services industry primarily to pursue financial rewards. According to the textbook, starting a business to make a lot of money:
A) often fails to live up to its hype
B) is equally as satisfying as other reasons for starting a business
C) is the number one reason people start their own business
D) is the number two reason that people start their own business, right behind the lack of better career prospects
E) does not rank among the top three reasons that people start their own business
Answer: A
Diff: 2 Page Ref: 9
Topic: Introduction to Entrepreneurship
AACSB: Reflective Thinking
Objective: Describe the role of entrepreneurs and small business
12) According to the textbook, the four characteristics of successful entrepreneurs are:
A) passion for the business, on the cutting edge of technological change, very charismatic, and tenacity despite failure
B) young and energetic, passion for the business, product/customer focus, and seeks recognition
C) passion for the business, tenacity despite failure, product/customer focus, and execution intelligence
D) on the cutting edge of technological change, forward thinking, tenacity despite failure, and product/customer focus
E) passion for the business, seeks recognition, young and energetic, and execution intelligence
Answer: C
Diff: 2 Page Ref: 9
Topic: Introduction to Entrepreneurship
AACSB: Reflective Thinking
Objective: Describe the role of entrepreneurs and small business
13) The number one characteristic shared by successful entrepreneurs is:
A) a desire to achieve financial rewards
B) passion for the business
C) a desire to employ other people
D) a desire to fulfill a lifetime dream
E) a desire to bring a revolutionary new product or service to market
Answer: B
Diff: 2 Page Ref: 9
Topic: Introduction to Entrepreneurship
AACSB: Reflective Thinking
Objective: Describe the role of entrepreneurs and small business

14) Which of the following was not identified in the textbook as one of the five primary reasons passion is important for the launch of a successful entrepreneurial organization?
A) the ability to stick to a plan even when faced with evidence that changes are needed
B) a willingness to work hard for an extended period of time
C) ability to overcome setbacks and “no’s”
D) the ability to listen to feedback on the limitations of your organization and yourself
E) perseverance and persistence when the going gets tough
Answer: A
Diff: 2 Page Ref: 10
Topic: Introduction to Entrepreneurship
AACSB: Reflective Thinking
Objective: Describe the role of entrepreneurs and small business
15) Stacey Wills, who is at heart a craftsperson, recently started a firm to manufacturer a new innovative food blender. Stacey’s desire is to sell her food blender to as many people as possible, because she firmly believes in the merits of her product. Stacey’s story best illustrates which of the following characteristics, or attributes, of a successful entrepreneur?
A) product/customer focus
B) execution intelligence
C) tenacity despite failure
D) a desire to please consumers
E) a desire to gain financial rewards
Answer: A
Diff: 1 Page Ref: 11
Topic: Introduction to Entrepreneurship
AACSB: Reflective Thinking
Objective: Describe the role of entrepreneurs and small business
16) The What Went Wrong? feature in Chapter 1 focuses on YouCaster, a company that was launched in 2006 but eventually went out of business. According to the feature, YouCaster failed for two primary reasons:
A) a poorly equipped team of entrepreneurs and a lack of passion
B) too few customers and a lack of intellectual property protection
C) a lack of resolve and poor execution intelligence
D) a lack of execution intelligence and a poor product/customer focus
E) a lack of passion and too few customers
Answer: E
Diff: 2 Page Ref: 12
Topic: Introduction to Entrepreneurship
AACSB: Reflective Thinking
Objective: Describe the role of entrepreneurs and small business

17) Chad and Allison Druxman launched a firm several years ago and have been particularly successful in introducing new products to the marketplace. One thing that Chad and Allison are particularly good at is translating their thoughts, creativity, and imaginations into products that reach the marketplace. The ability to make this happen is most closely related to which of the following characteristics of successful entrepreneurs?
A) passion for the business
B) execution intelligence
C) tenacity despite failure
D) product/market focus
E) a desire for recognition
Answer: B
Diff: 2 Page Ref: 13
Topic: Introduction to Entrepreneurship
AACSB: Reflective Thinking
Objective: Describe the role of entrepreneurs and small business
18) The Savvy Entrepreneurial Firm feature in Chapter 1 focuses on Revio Mobile (maker of Angry Birds) and Zeo, two companies that have produced successful products. The feature’s main purpose is to illustrate the importance of ________ as a key characteristic of the founders of entrepreneurial firms.
A) execution intelligence
B) a desire to pursue financial rewards
C) tenacity despite failure
D) passion for the business
E) product/customer focus
Answer: C
Diff: 3 Page Ref: 14
Topic: Introduction to Entrepreneurship
AACSB: Reflective Thinking
Objective: Describe the role of entrepreneurs and small business
19) Which of the following is not one of the five common myths about entrepreneurs?
A) Entrepreneurs are tenacious.
B) Entrepreneurs are moderate risk takers.
C) Entrepreneurs should be young and energetic.
D) Entrepreneurs love the spotlight.
E) Entrepreneurs are born not made.
Answer: A
Diff: 2 Page Ref: 15
Topic: Introduction to Entrepreneurship
AACSB: Reflective Thinking
Objective: Describe the role of entrepreneurs and small business

20) Which of the following was not identified in the textbook as one of the common traits and characteristics of entrepreneurs?
A) has a strong work ethic
B) intolerant of ambiguity
C) visionary
D) promoter
E) decisive
Answer: B
Diff: 3 Page Ref: 16
Topic: Introduction to Entrepreneurship
AACSB: Reflective Thinking
Objective: Describe the role of entrepreneurs and small business

21) According to the textbook, entrepreneurs are:
A) gamblers
B) moderate risk takers
C) aggressive risk takers
D) forceful risk takers
E) minimal risk takers
Answer: B
Diff: 2 Page Ref: 16
Topic: Introduction to Entrepreneurship
AACSB: Reflective Thinking
Objective: Describe the role of entrepreneurs and small business

22) Suppose you are a Small Business Development Center counselor and you’re looking at the personality profiles of five potential entrepreneurs. Based on the profiles, which individual has the most desirable mix of personal characteristics to become a successful entrepreneur?
A) Candidate A: visionary, energetic, moderate risk taker
B) Candidate B: seeks recognition, self-starter, creative
C) Candidate C: visionary, high risk taker, energetic
D) Candidate D: high risk taker, achievement-motivated, networker
E) Candidate E: tolerant for ambiguity, seeks recognition, motivated primarily by money
Answer: A
Diff: 3 Page Ref: 16
Topic: Introduction to Entrepreneurship
AACSB: Reflective Thinking
Objective: Describe the role of entrepreneurs and small business

23) Which of the following is not a personality trait or characteristic common among entrepreneurs?
A) promoter
B) visionary
C) short attention span
D) alert to opportunities
E) self-starter
Answer: C
Diff: 3 Page Ref: 16
Topic: Introduction to Entrepreneurship
AACSB: Reflective Thinking
Objective: Describe the role of entrepreneurs and small business

24) Which of the following statement is correct regarding entrepreneurial activity and age ranges?
A) The highest percentage of entrepreneurs falls in the 19 years old and younger age range.
B) The highest percentage of entrepreneurs falls in the 20 to 34 age range.
C) The highest percentage of entrepreneurs falls in the 35 to 44 age range.
D) The highest percentage of entrepreneurs falls in the 45 to 54 age range.
E) The highest percentage of entrepreneurs falls in the 55+ age range.
Answer: B
Diff: 2 Page Ref: 16
Topic: Introduction to Entrepreneurship
AACSB: Reflective Thinking
Objective: Describe the role of entrepreneurs and small business
25) According to the textbook, the biggest jump in entrepreneurial activity, by age range, from 1996 to 2010 is among entrepreneurs in the:
A) 19 years old and younger age range
B) 20 to 34 age range
C) 35 to 44 age range
D) 45 to 54 age range
E) 55 to 64 age range
Answer: E
Diff: 3 Page Ref: 17
Topic: Introduction to Entrepreneurship
AACSB: Reflective Thinking
Objective: Describe the role of entrepreneurs and small business
26) According to Chapter 1, investors often cite the ________ as their most important criterion in the decision to fund new ventures.
A) financial position of the new venture
B) strength of the industry the new firm is entering
C) strength of the new venture’s marketing plan
D) strength of the business idea
E) strength of the entrepreneur
Answer: E
Diff: 2 Page Ref: 17
Topic: Introduction to Entrepreneurship
AACSB: Reflective Thinking
Objective: Describe the role of entrepreneurs and small business

27) According to Chapter 1, a sentiment that venture capitalists often express is that:
A) the strength of the entrepreneur and the strength of the business idea are of equal importance
B) they would never fund a strong entrepreneur with a weak business idea
C) they would rather fund a strong entrepreneur with a mediocre business idea than fund a strong business idea with a mediocre entrepreneur
D) a new venture’s marketing plan is more important than either the strength of the entrepreneur or the strength of the business idea
E) they would rather fund a strong business idea with a mediocre entrepreneur than fund a strong entrepreneur with a mediocre business idea
Answer: C
Diff: 3 Page Ref: 17
Topic: Introduction to Entrepreneurship
AACSB: Reflective Thinking
Objective: Describe the role of entrepreneurs and small business
28) Pacific Printing LLC is a startup that is working on a new technology for the printing industry. Because the technology it’s working on is highly proprietary, the company is located in the warehouse district of a large western city. Pacific’s founder, Jan Sims, rarely gives interviews, and is careful to not divulge much about what the company is doing. Which of the following common myths about entrepreneurs does the behavior of its founder, Jan Sims, dispel?
A) Entrepreneurs are born, not made.
B) Entrepreneurs are gamblers.
C) Entrepreneurs are motivated primarily by money.
D) Entrepreneurs should be young and energetic.
E) Entrepreneurs love the spotlight.
Answer: E
Diff: 2 Page Ref: 17
Topic: Introduction to Entrepreneurship
AACSB: Reflective Thinking
Objective: Describe the role of entrepreneurs and small business
29) According to the textbook, there are three types of startup firms:
A) lifestyle firms, general firms, and entrepreneurial firms
B) standard-of-living firms, statutory firms, and general firms
C) entrepreneurial firms, standard-of-living firms, and statutory firms
D) lifestyle firms, salary-substitute firms, and entrepreneurial firms
E) innovative firms, entrepreneurial firms, and standard firms
Answer: D
Diff: 2 Page Ref: 17
Topic: Introduction to Entrepreneurship
AACSB: Reflective Thinking
Objective: Describe the role of entrepreneurs and small business

30) According to the textbook, there are three types of startup firms: entrepreneurial firms, lifestyle firms, and:
A) civil firms
B) salary-substitute firms
C) statutory firms
D) standard-of-living firms
E) innovative firms
Answer: B
Diff: 1 Page Ref: 17
Topic: Introduction to Entrepreneurship
AACSB: Reflective Thinking
Objective: Describe the role of entrepreneurs and small business
31) Kentucky Soup and Salad is a casual dining restaurant that has been owned by Kenneth Peterson for the past 11 years. The restaurant offers a menu that is typical for casual dining restaurants and affords Kenneth a level of income that is similar to what he would earn in a conventional job. According to the textbook, Kentucky Soup and Salad is an example of a(n):
A) salary-substitute firm
B) entrepreneurial firm
C) quality-of-life firm
D) lifestyle firm
E) industry-standard firm
Answer: A
Diff: 2 Page Ref: 18
Topic: Introduction to Entrepreneurship
AACSB: Reflective Thinking
Objective: Describe the role of entrepreneurs and small business
32) Tahoe Trips & Trails, a company mentioned in Chapter 1, leads multiday outdoor adventure trips for private groups and corporate clients to Lake Tahoe, Yosemite, Death Valley, and similar locations. The company was started by Hanna Sullivan, an individual that gave up a prestigious job with a private investment company because Tahoe Trips & Trails better accommodates her personal lifestyle. Tahoe Trips & Trails is an example of a(n) ________ firm.
A) entrepreneurial
B) salary-substitute
C) standard-of-living
D) statutory
E) lifestyle
Answer: E
Diff: 1 Page Ref: 18
Topic: Introduction to Entrepreneurship
AACSB: Reflective Thinking
Objective: Describe the role of entrepreneurs and small business

33) Entrepreneurial firms:
A) are small firms that yield a level of income for their owner or owners that is similar to what they would earn when working for an employer
B) bring to market new products and services that are not particularly innovative
C) offer to customers common products that are not particularly innovative, and provide their owner or owners the opportunity to pursue a particular lifestyle and earn a living while doing so
D) provide their owner or owners the opportunity to pursue a particular lifestyle and earn a living while doing so
E) bring new products and services to market by creating and seizing opportunities
Answer: E
Diff: 2 Page Ref: 18
Topic: Introduction to Entrepreneurship
AACSB: Reflective Thinking
Objective: Describe the role of entrepreneurs and small business