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Department
Entrepreneurship
Course
ENTR 2P91
Professor
Scott Henderson
Semester
Fall

Description
CHAPTER 1: ENTREPRENEURSHIP: EVOLUTIONARY DEVELOPMENT- REVOLUTIONARY IMPACT TRUE/FALSE 1. Entrepreneurs are aggressive catalysts for change within the marketplace. ANS: T PTS: 1 NAT: AACSB Reflective Thinking | Individual Dynamics KEY: page 3 2. Entrepreneurs are not heroes in today’s marketplace. ANS: F PTS: 1 NAT: AACSB Reflective Thinking | Individual Dynamics KEY: page 3 3. Entrepreneurs are the major source of innovation and job creation in any economy. ANS: T PTS: 1 NAT: AACSB Reflective Thinking | Individual Dynamics KEY: page 3 4. Entrepreneurship is more than mere creation of business. ANS: T PTS: 1 NAT: AACSB Reflective Thinking | Individual Dynamics KEY: page 3 5. Small enterprises are the most common form of establishment, regardless of the industry. ANS: T PTS: 1 NAT: AACSB Reflective Thinking | Individual Dynamics KEY: page 3 6. During the past ten years, new business incorporations averaged 600,000 per year. ANS: T PTS: 1 NAT: AACSB Reflective Thinking | Individual Dynamics KEY: page 16 7. One of every 1000 adults participates in the founding of a new firm every year. ANS: F PTS: 1 NAT: AACSB Reflective Thinking | Individual Dynamics KEY: page 16 8. The entrepreneurial spirit is unique toAmerica and Western Europe. ANS: F PTS: 1 NAT: AACSB Reflective Thinking | Individual Dynamics KEY: page 17 9. A“gazelle” is a business establishment with at least 20 percent sales growth every year for five years. ANS: T PTS: 1 NAT: AACSB Reflective Thinking | Individual Dynamics KEY: page 18 10. Gazelles produce only one half the innovations per employee that larger firms do. ANS: F PTS: 1 NAT: AACSB Reflective Thinking | Individual Dynamics KEY: page 18 11. New and smaller firms obtain more patents per sale than do larger firms. ANS: T PTS: 1 NAT: AACSB Reflective Thinking | Individual Dynamics KEY: page 18 12. Gazelles produced 5 million jobs in the downsizing years of the 1990's. ANS: T PTS: 1 NAT: AACSB Reflective Thinking | Individual Dynamics KEY: page 18 13. Gazelles always operate in national or international markets. ANS: F PTS: 1 NAT: AACSB Reflective Thinking | Individual Dynamics KEY: page 19 14. New and smaller firms are responsible for 95% of all radical innovations. ANS: T PTS: 1 NAT: AACSB Reflective Thinking | Individual Dynamics KEY: page 18 15. Gazelles are almost always high tech. ANS: F PTS: 1 NAT: AACSB Reflective Thinking | Individual Dynamics KEY: page 19 16. Gazelles don’t always get VC funding. ANS: T PTS: 1 NAT: AACSB Reflective Thinking | Individual Dynamics KEY: page 19 17. Women’s share of self employment will still lag behind that of men by the end of 2005. ANS: F PTS: 1 NAT: AACSB Reflective Thinking | Individual Dynamics KEY: page 20 18. Three characteristics of an entrepreneur are personal initiative, management skills, and a desire for autonomy. ANS: T PTS: 1 NAT: AACSB Reflective Thinking | Individual Dynamics KEY: page 4 19. Large firms rather than the entrepreneur are the aggressive catalyst for change in the world of business. ANS: F PTS: 1 NAT: AACSB Reflective Thinking | Individual Dynamics KEY: page 4 20. The word entrepreneur is derived from the Spanish word entreprendre, meaning “to undertake.” ANS: F PTS: 1 NAT: AACSB Reflective Thinking | Individual Dynamics KEY: page 4 21. There is no single definition of an entrepreneur; however research is providing a sharper focus on the subject. ANS: T PTS: 1 NAT: AACSB Reflective Thinking | Individual Dynamics KEY: page 4 22. Recognition of entrepreneurs dates back to the French economist Richard Cantillon. ANS: T PTS: 1 NAT: AACSB Reflective Thinking | Individual Dynamics KEY: page 4 23. In the past century, entrepreneurship has become closely linked with socialism and regulated business. ANS: F PTS: 1 NAT: AACSB Reflective Thinking | Individual Dynamics KEY: page 4 24. Entrepreneurs are the major source of innovation and job creation in the economy. ANS: T PTS: 1 NAT: AACSB Reflective Thinking | Individual Dynamics KEY: page 3 25. According to Robert C. Ronstadt, entrepreneurship is the process of creating incremental wealth. ANS: T PTS: 1 NAT: AACSB Reflective Thinking | Individual Dynamics KEY: page 5 26. Most entrepreneurs are inventors. ANS: F PTS: 1 NAT: AACSB Reflective Thinking | Individual Dynamics KEY: page 6 27. An entrepreneur does not need a lot of money or luck. ANS: T PTS: 1 NAT: AACSB Reflective Thinking | Individual Dynamics KEY: page 6 28. Prepared entrepreneurs who seize opportunities when they arise often appear to be lucky. ANS: T PTS: 1 NAT: AACSB Reflective Thinking | Individual Dynamics KEY: page 6 29. Entrepreneurs are high risk takers. ANS: F PTS: 1 NAT: AACSB Reflective Thinking | Individual Dynamics KEY: page 8 30. Entrepreneurs always start their business at a young age. ANS: F PTS: 1 NAT: AACSB Reflective Thinking | Individual Dynamics KEY: page 6 31. Characteristics of entrepreneurs cannot be taught or learned. ANS: F PTS: 1 NAT: AACSB Reflective Thinking | Individual Dynamics KEY: page 5 32. Entrepreneurs are born not made. ANS: F PTS: 1 NAT: AACSB Reflective Thinking | Individual Dynamics KEY: page 5 33. Entrepreneurs are doers not thinkers. ANS: F PTS: 1 NAT: AACSB Reflective Thinking | Individual Dynamics KEY: page 5 34. Entrepreneurs must fit the “profile.” ANS: F PTS: 1 NAT: AACSB Reflective Thinking | Individual Dynamics KEY: page 6 35. Entrepreneurs are often very methodical people who plan their moves very carefully. ANS: T PTS: 1 NAT: AACSB Reflective Thinking | Individual Dynamics KEY: page 6 36. The “corridor principle” states that entrepreneurs often get stuck on one idea. ANS: F PTS: 1 NAT: AACSB Reflective Thinking | Individual Dynamics KEY: page 7 37. Entrepreneurs are often known as calculated risk takers, as opposed to “gamblers.” ANS: T PTS: 1 NAT: AACSB Reflective Thinking | Individual Dynamics KEY: page 8 38. The macro view includes external processes that are sometimes beyond the control of the entrepreneur. ANS: T PTS: 1 NAT: AACSB Reflective Thinking | Individual Dynamics KEY: page 8 39. The displacement school of thought focuses on group phenomena. ANS: T PTS: 1 NAT: AACSB Reflective Thinking | Individual Dynamics KEY: page 9 40. The strategic formulation school of thought emphasizes the planning process in successful venture development. ANS: T PTS: 1 NAT: AACSB Reflective Thinking | Individual Dynamics KEY: page 12 41. In the environmental school of thought, legal issues surrounding the natural environment are primary. ANS: F PTS: 1 NAT: AACSB Reflective Thinking | Individual Dynamics KEY: page 9 42. The financial/capital entrepreneurial school of thought focuses on the potential profit of the business idea. ANS: F PTS: 1 NAT: AACSB Reflective Thinking | Individual Dynamics KEY: page 9 43. Political, cultural, and economic displacement are all part of the displacement school of entrepreneurial thought. ANS: T PTS: 1 NAT: AACSB Reflective Thinking | Individual Dynamics KEY: page 9 44. “Great chef” strategies focus on unique markets. ANS: F PTS: 1 NAT: AACSB Reflective Thinking | Individual Dynamics KEY: page 12 45. Entrepreneurship involves an interdisciplinary approach. ANS: T PTS: 1 NAT: AACSB Reflective Thinking | Individual Dynamics KEY: page 8 46. The entrepreneurial events approach focuses on such factors as initiative, organization, autonomy, and risk taking. ANS: T PTS: 1 NAT: AACSB Reflective Thinking | Individual Dynamics 47. The four major dimensions considered in the multidimensional approach are the individual, the environment, the organization, and the process. ANS: T PTS: 1 NAT: AACSB Reflective Thinking | Individual Dynamics MULTIPLE CHOICE 1. Entrepreneurs are best characterized as: a aggressive catalysts for change c hard to get along with . . b d good managers not fitting in to an ordinary . . workplace ANS: A PTS: 1 NAT: AACSB Reflective Thinking | Individual Dynamics KEY: page 3 2. During the past ten years, there were approximately how many business incorporations per year? a 600,000 c 700,000 . . b 500,000 d 1 million . . ANS: A PTS: 1 NAT: AACSB Reflective Thinking | Individual Dynamics KEY: page 16 3. Entrepreneurs will always be a a key factor in the stability of the small business sector . b hindered by lack of funding . c the major source of job creation and innovation in any economy . d a little quirky . ANS: C PTS: 1 NAT: AACSB Reflective Thinking | Individual Dynamics KEY: page 17 4. Since the new century the US has had an annual new firm birth rate of a 4-6 per 100 existing establishments c 50-60 per 100 existing establishments . . b 14-16 per 100 existing establishments d almost none . . ANS: B PTS: 1 NAT: AACSB Reflective Thinking | Individual Dynamics KEY: page 17 5. In the evolutionary process of economic growth, _________ plays the crucial and indispensable role of providing the “social glue” that binds together both high-tech and “Main Street” activities. a entrepreneurship c the Internet . . b supply and demand d management . . ANS: A PTS: 1 NAT: AACSB Reflective Thinking | Individual Dynamics KEY: page 20 6. Entrepreneurs and gazelles have been credited with making disproportionate contributions to all but which of the following. a innovation c economic renewal . . b job creation d unemployment . . ANS: D PTS: 1 NAT: AACSB Reflective Thinking | Individual Dynamics KEY: page 18 7. Which of the following statements best describes a “gazelle?” a a business with at least 20% growth every year . b a business with no sales growth . c a business that has acquired numerous firms . d an inventor who turned business person . ANS: A PTS: 1 NAT: AACSB Reflective Thinking | Individual Dynamics KEY: page 18 8. Gazelles have been responsible for which of the following: a some job growth c 30 percent of all radical innovations . . b 55 percent of innovations d most job turnover . . ANS: B PTS: 1 NAT: AACSB Reflective Thinking | Individual Dynamics KEY: page 18 9. ______________ is the economic basis for all entrepreneurial activity. a Individuality c Voodoo economics . . b Capitalism d Free enterprise . . ANS: D PTS: 1 NAT: AACSB Reflective Thinking | Individual Dynamics KEY: page 5 10. The word entrepreneur is derived from the French entreprendre, which is translated as a to apprehend. c to compete. . . b to undertake. d to enter and dare. . . ANS: C PTS: 1 NAT: AACSB Reflective Thinking | Individual Dynamics KEY: page 4 11. The entrepreneur is one who a dreams all day. c oversees manufacturing. . . b manages. d invents new products. . . ANS: B PTS: 1 NAT: AACSB Reflective Thinking | Individual Dynamics KEY: page 4 12. Which of the following characteristics is most important to an entrepreneur? a management skills c friendliness . . b neatness d having a nice office. . . ANS: A PTS: 1 NAT: AACSB Reflective Thinking | Individual Dynamics KEY: page 4 13. The study of entrepreneurship is a based on the field of management c based on the field of sociology . . b based on the field of accounting d interdisciplinary . . ANS: D PTS: 1 NAT: AACSB Reflective Thinking | Individual Dynamics KEY: page 8 14. Which economist associated the “risk bearing” activity in the economy with the entrepreneur? a Richard Cantillon c Peter F. Drucker . . b Robert C. Ronstadt d Jean Baptiste Say . . ANS: A PTS: 1 NAT: AACSB Reflective Thinking | Individual Dynamics KEY: page 4 15. Which is not one of the chief characteristics of an entrepreneur? a personal initiative c risk taking . . b ability to consolidate resources d desire for control of people . . ANS: D PTS: 1 NAT: AACSB Reflective Thinking | Individual Dynamics KEY: page 4 16. Which is a key factor in successful entrepreneurship? a identifying the strengths of a venture . b setting up clear timetables . c minimizing problems through careful strategy formulation . d the product itself . ANS: C PTS: 1 NAT: AACSB Reflective Thinking | Individual Dynamics 17. Entrepreneurial traits include which of the following? a salesmanship c wealth . . b initiative d edginess . . ANS: B PTS: 1 NAT: AACSB Reflective Thinking | Individual Dynamics KEY: page 4 18. Robert C. Ronstadt put together a summary definition of entrepreneur that included which of the following key phrases? a the acceptance of risk of failure . b the dynamic process of creating incremental wealth . c take advantage of economic endowments . d a phenomenon that comes under the wider aspect of leadership . ANS: B PTS: 1 NAT: AACSB Reflective Thinking | Individual Dynamics KEY: page 5 19. In the present century, which of the following is entrepreneurship considered synonymous with: a free enterprise. c multimillion dollar enterprises. . . b socialism. d partnership. . . ANS: A PTS: 1 NAT: AACSB Reflective Thinking | Individual Dynamics KEY: page 5 20. Which is a true statement about entrepreneurs? a Entrepreneurs are doers and thinkers. . b All you need is money to be an entrepreneur. . c Ignorance is bliss for an entrepreneur. . d Inheriting a business is the best way to become an entrepreneur. . ANS: A PTS: 1 NAT: AACSB Reflective Thinking | Individual Dynamics KEY: page 5 21. Throughout the years, many myths have arisen about entrepreneurship as a result of? a a lack of research about entrepreneurship c a total disregard for the truth . . b a lack of interest in the field d a destructive attitude by government . . ANS: A PTS: 1 NAT: AACSB Reflective Thinking | Individual Dynamics KEY: page 5 22. The “corridor principle” is best described by which of the following statements? a If at first you don’t succeed, try, try, again. . b The right place at the right time. . c With every new venture launched, new and unintended opportunities arise. . d Luck happens when preparation meets opportunity. . ANS: A PTS: 1 NAT: AACSB Reflective Thinking | Individual Dynamics KEY: page 7 23. Which of the following traits is not that of an entrepreneur? a drive c willingness to take risks . . b shyness d human relations skills . . ANS: B PTS: 1 NAT: AACSB Reflective Thinking | Individual Dynamics KEY: page 4 24. Money is necessary but not sufficient for entrepreneurs to survive because a Lack of preparation and planning can be a main source of failure. . b The ups and downs of the economy determine the entrepreneur’s success. . c The idea is the source of success. . d Money and being in the right place at the right time spells success. . ANS: A PTS: 1 NAT: AACSB Reflective Thinking | Individual Dynamics KEY: page 6 25. Which of the following is not a common myth about entrepreneurs? a Entrepreneurs are academic and social misfits. . b Entrepreneurs are doers, not thinkers. . c Entrepreneurs today are considered heroes. . d All you need is money to be an entrepreneur. . ANS: C PTS: 1 NAT: AACSB Reflective Thinking | Individual Dynamics KEY: page 5 26. Which statement is not true? a Luck happens when preparation meets opportunity. . b Entrepreneurs do not hold up in today’s competitive market. . c Failure due to lack of proper financing often is
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