Name______
Entrepreneurship I Pretest
1-What is one of the main reasons why small businesses are strongly promoted and supported by local government?
a-They serve only their local communities.
b-They may become a big business.
c-They are owned by one person.
d-They are important to the economy.
2- Which of the following is most likely to have a negative effect on domestic small-business growth:
a-Involuntary tax reductions
b-Low interest rates
c-Restrictive loan policies
d-Slow inflation
3- Home-based businesses are attractive to many people because the businesses generally
a-yield higher profit margins.
b-have lower start-up costs.
c-provide owners a steady income.
d-require less technical training.
4- What is a trend that affects the growth of entrepreneurial ventures?
a-A rise in consumers' desire for slow-response times
b-The shift to an agricultural-based society
c-A higher demand for more convenience products
d-The reduced need for health care and related services
5-Which of the following sources of start-up information would you recommend to an entrepreneur looking for information about the average start-up and operating costs for a self-serve laundromat:
a-Service Corps of Retired Executives
b-Local chamber of commerce
c-Coin laundry trade association
d-Small Business Administration
6-A reliable online source of general business start-up information is
a-Wikipedia (
b-the Project Management Institute (
c-the Small Business Administration (
d-the National Retail Federation (
7-Which of the following is an example of a written business inquiry:
a-memo outlining an upcoming meeting agenda
b-An e-mail requesting vendor pricing and discounts
c-A form describing an employee's performance review
d-A report summarizing annual financial information
8-When writing a letter of inquiry, when should you identify the purpose of your letter?
a-At the beginning of the letter
b-After describing your company
c-Once the recipient has agreed to meet with you
d-After identifying what prompted your inquiry (such as an advertisement)
9- Entrepreneurial discovery is an important process in a free-enterprise economic system because an entrepreneur or small-business owner can
a-satisfy an unmet demand.
b-improve economic sanctions.
c-form a technological monopoly.
d-change legal requirements.
10-Which of the following statements is true about entrepreneurial discovery:
a-It ensures that start-up businesses have continuous funding.
b-It's an ongoing process that facilitates a business's success rate.
c-It provides entrepreneurs with professional development training.
d-It's a way to determine the long-term profit that a start-up company can generate.
11-When conducting an environmental scan, which of the following is an economic factor that a business should consider:
a-Consumer spending habits
b-Local demographics
c-Global trade regulations
d-Restricted sales territories
12-Which of the following is a true statement about a business's environment:
a-It can be avoided.
b-It is always changing.
c-It consists of the economy and technology.
d-It may not affect the business, depending on the industry.
13-Which of the following is a global trend that might encourage an entrepreneur to consider international business opportunities:
a-Higher allowances
b-Enforceable trade agreements
c-Lower tariffs
d-Flexible currency rates
14-When determining venture-creation opportunities, entrepreneurs must first
a-obtain financing.
b-identify staffing needs.
c-conduct research.
d-select a location.
15-Market opportunity is often affected by
a-methodology.
b-rewards.
c-location.
d-timing
16-The primary goal during the brainstorming process is to
a-come up with as many ideas as possible.
b-analyze each idea as it is presented.
c-rate each idea in relation to one another.
d-come up with a set number of ideas within a certain time.}
17-People who are naturally creative often are
a-highly educated.
b-mentally flexible.
c-physically active.
d-emotionally controlled
18-Which of the following is usually a characteristic of a creative person:
a-Likes to seek out new challenges
b-Is patient with other people
c-Depends on others
d-Prefers working under supervision
19-Which of the following processes helps aspiring entrepreneurs generate venture ideas:
a-Financial planning
b-Goal setting
c-Decision making
d-Creative thinking
20-When generating ideas for new businesses, entrepreneurs often look for ways to
a-rationalize spending.
b-solve problems.
c-increase liability.
d-control outcomes
21-Which of the following is a way that a business can determine if a product will fulfill its target market's needs:
a-Observe workers
b-Ask the customers
c-Distribute promotional materials
d-Develop a prospect list
22-A business might take an existing product and alter it to fulfill a specific need for a different
a-medium.
b-utility.
c-product mix.
d-target market
23-Jack, a manager, said to his staff, "I know that many of you think that this is a risky course of action. But, I've decided that we should proceed. If this is successful, it could greatly benefit the company. If it fails, I'll accept the consequences and work to find a new solution." What is Jack doing?
a-Requesting that his staff support his decision
b-Indicating that he doesn't think he's made a good decision
c-Asking his staff to share the blame, if the action fails
d-Acceptingresponsibility for his decision
24-After Porter realized that he processed an order incorrectly, he waited too long to correct the problem. As a result, an incorrect item was shipped to the customer. Now, the customer will need to ship the item back to the warehouse, and Porter's company will need to pay extra charges to have the product returned. This situation illustrates that
a-customers are likely to be very angry when employees make mistakes.
b-employees should tell their supervisors about all problems as soon as they occur.
c-the company has unrealistic expectations about Porter's ability to perform his job.
d-an employee's decisions and actions can negatively impact others.
25-An entrepreneur considers venture location and financial needs during the ______process.
a-distribution
b-implementation
c-controlling
d-planning
26-Which of the following is an operational issue that entrepreneurs must consider when planning their businesses:
a-Source of financing
b-Production process
c-Target market
d-Direct competitors
27-In order for a business to generate a profit, its operating costs must be ______the gross margin.
a-equal to
b-less than
c-greater than
d-identical to
28-The costs of operating a business are often called ______expenses.
a-fixed
b-variable
c-overhead
d-markdown
29-Which of the following statements is true about business start-up requirements:
a-Equipment is the least expensive requirement for a start-up business.
b-New business owners usually need to register for patent protection.
c-Purchasing a franchise is usually easy and inexpensive for start-up business owners.
d-The financial needs to start a new business depend on the nature of the venture. }
30-Costs of sales for a new manufacturing venture typically include
a-trade show attendance, raw materials, and equipment.
b-raw materials, equipment, and product inventory.
c-trade show attendance, product inventory, and Internet access.
d-Internet access, attorney fees, and sales lead lists.
31-Jean usually says “Good morning!” to Dave when he arrives at work each day. Today, though, Jean didn’t even look up when Dave passed by her desk. Dave should assume that
a-Jean is mad at him because he didn’t decorate her desk for her birthday last week.
b-their supervisor yelled at Jean for wasting time socializing when she should be working.
c-Jean is working so hard on a report for their manager that she didn’t notice Dave when he walked by.
d-there must be a reason for Jean’s behavior, but he doesn’t know exactly what that reason is
32-The Roderick Company recently laid off several employees due to declining sales. Now, the company’s management expects the remaining employees to take over responsibilities previously held by the workers who were let go. Unfortunately, management failed to explain who among the staff would be responsible for completing which tasks. The employees’ job responsibilities have become
a-ambiguous.
b-easy.
c-dangerous.
d-prestigious
33-Which of the following is a characteristic of a well-conducted feasibility study:
a-Subjective
b-General
c-Abbreviated
d-Complete
34-The primary purpose of a feasibility study is to answer which of the following questions:
a-What are the opportunity costs of this project?
b-What technology will be needed for this project?
c-Should we proceed with this project?
d-Is the business plan valid?
35-Marketing strategies are designed and implemented for the overall purpose of
a-changing the image of the business.
b-achieving planned goals.
c-improving management techniques.
d-increasing business profits immediately
36-Which of the following is a consideration in the place element of marketing:
a-Offering warranties or guarantees
b-Using sales promotion
c-Choosing distribution channels
d-Extending credit to customers
37-Companies have been forced to pay more attention to the specific needs of consumers because of
a-merchandising.
b-automation.
c-advertising.
d-competition
38-Procter & Gamble's decision to offer different types of soaps in a wide range of prices is an example of
a-direct marketing.
b-geographic segmentation.
c-market segmentation.
d-industrial marketing
39-A marketing plan should outline the specific activities that the business will use to
a-evaluate its sales policies.
b-meet the needs of its employees.
c-increase its buying power.
d-achieve its marketing objectives.
40-Which of the following is an important benefit of marketing plans:
a-They ensure a yearly profit.
b-They help recruit quality employees.
c-They develop exciting products.
d-They can help obtain funding.
41-A business identifies a market that shares common characteristics on the basis of where people live and work, which is an example of market identification by ______segmentation.
a-demographic
b-ethnicity
c-geographic
d-values
42-Businesses that segment the market based on psychographics are grouping people according to their
a-education.
b-marital status.
c-lifestyles.
d-occupation.
43-Which of the following is a factor that businesses often consider when conducting a market analysis:
a-Location of the test market
b-Safety of the research process
c-Size of the market next year
d-Design of the questionnaire
44-One of the purposes of conducting a market analysis is to develop a(n)
a-operating budget.
b-customer profile.
c-distribution plan.
d-management team
45-A business that fails to protect its employees from unnecessary risk or health hazards on the job may be sued for
a-incompetence
b-misrepresentation
c-libel
d-negligence
46-Which of the following types of laws protects a business's inventions or written works from the unauthorized use by others:
a-Income tax
b-Consumer protection
c-Intellectual property
d-Product liability
47-Can any brand name be selected and used by a business?
a-No, the name must be legally available for use.
b-Yes, brand names cannot be owned by a business.
c-Yes, a business can use any name it wants to use.
d-No, the name must be registered before it can be used.
48-One way that a national business chain can make sure that customers will remember its name is to develop a brand name that is
a-long and complicated.
b-similar to those used by competitors.
c-easy to read and pronounce.
d-associated with a specific period of time
49-Which of the following characteristics is descriptive of a meaningful company objective:
a-Measurable
b-General
c-Vague
d-Unlimited
50-Which of the following is a reason why managers develop company objectives:
a-To identify business purpose
b-To solve operating problems
c-To forecast sales potential
d-To communicate with employees
51-Which of the following does effective product/service management help businesses to do:
a-To barter
b-To compete
c-To prospect
d-To recruit
52-When considering a new product for your company, you decide to introduce the product in only three states for a six-month period. This is known as
a-product development.
b-commercialization.
c-feasibility analysis.
d-test marketing
53-Sandy opened a small business that carries a very wide variety of products of varying qualities at many different prices. Sandy is losing customers who are disappointed with the selection, quality, and quantity of items. What is lacking in Sandy's product mix?
a-Consistency
b-Depth
c-Breadth
d-Width
54-Which of the following is an example of a company's using brand extension:
a-Coca-Cola adding Caffeine-Free Diet Coke
b-Winn-Dixie installing an ATM machine in its stores
c-Tyson packaging smaller portions of chicken for the elderly
d-Kroger adding Blue Bell ice cream to its frozen foods section}
55-When a business presents a service to the marketplace by emphasizing its economic value, the business is positioning the product on the basis of its
a-benefits.
b-features.
c-price.
d-competitors
56-A business that emphasizes a product's environmental friendliness is positioning the product by focusing on
a-price.
b-attributes.
c-competition.
d-reliability
57-When considering the services to offer customers, a business should determine if a specific service would
a-enhance customer-satisfaction levels.
b-offend the business's existing competitors.
c-increase the amount of customer returns.
d-stabilize variable interest rates.
58-A business is extending its operating hours to accommodate its customers. Which of the following is a business cost associated with this service:
a-Higher payroll expenses
b-Higher profit margins
c-Increased sales volume
d-Increased customer satisfaction
59-Marketers often condense USPs into short slogans because
a-a successful USP is always very short.
b-all work team members must memorize them.
c-there cannot be product differentiation through any other means.
d-customers tend to remember just one thing from an advertisement
60-If your company cannot fulfill its USP, it will
a-go bankrupt.
b-loose credibility.
c-spend more money.
d-gain business.
61-Channel members should share an equal commitment to the product's
a-name.
b-quality.
c-price.
d-packaging
62-Marketers determine distribution intensity so they can achieve
a-ideal market exposure.
b-perfect market balance.
c-complete market coverage.
d-total market saturation.
63-Certain product characteristics often require a business to select intermediaries that have specific
a-demands.
b-limitations.
c-needs.
d-capabilities.
64-Which of the following are product factors that a business considers when selecting a channel of distribution:
a-Unit value, order size, and complexity
b-Perishability, location, and order size
c-Complexity, perishability, and unit value
d-Location, unit value, and order size
65-Why would a manager of a local business keep track of the prices that similar businesses in the area are charging?
a-To remain competitive
b-To promote an image
c-To improve advertising
d-To offer new services
66-Which of the following is an example of a business using a flexible pricing policy:
a-Establishing prices that are competitive
b-Lowering prices during bad economic times
c-Setting prices as low as possible
d-Charging prices that customers expect to pay
67-What is the break-even point in units for a business whose total fixed costs are $325,500, selling price per unit is $18, and variable cost per unit is $15.50?
a-120,250
b-150,500
c-130,200
d-180,550
68-Clyde rented an ice-cream truck in order to earn money for college in the fall. His truck rental is $200 per week and has a yearly license fee of $52. It costs him $200 for 500 ice-cream bars that he plans to sell for $1.10 each. How many ice-cream bars must Clyde sell each week in order to reach the break-even point?
a-360
b-201
c-252
d-288
69-Businesses receive positive feedback about the effectiveness of their promotional messages when consumers
a-see their advertisements.
b-visit their competitors.
c-ask specific questions.
d-buy their products.
70-One of the main goals of promotion in marketing is to
a-select media.
b-create desire.
c-develop a message.
d-monitor feedback.
71-Newspapers and magazines are categorized as ______media.
a-time
b-publications
c-broadcast
d-direct
72-Repeated exposure to the largest, most diverse population of people is a benefit of ______advertising.
a-out-of-home
b-directory
c-newspaper
d-radio
73-When beginning to develop a promotional plan, it is important for a business to
a-compile a list of activities.
b-become an active networker.
c-decide on its promotional strategy.
d-define its promotional goals.
74-Which of the following is an example of a measurable objective that a business might include in its promotional plan:
a-Distribute 500 flyers by March 1
b-Tell people about the business
c-Design a new flyer
d-Run an ad in several newspapers
75-Which of the following is an example of an external change that could affect a business's sales forecast:
a-A new sales rep has been hired to develop the company's territory in Texas.
b-The population of a town increases when a new hospital opens in the community.
c-The company plans to modify its approach to mailing catalogs to customers.
d-A company plans to raise prices on its products.
76-Which of the following individuals would a business be most likely to ask for a prediction of next year's sales:
a-Financial planner
b-Accounting clerk
c-Inventory specialist
d-Experienced salesperson