ENTR 321 Study Guide PDF

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ENTR/MNGT 321 Study Guide 1. The word entrepreneur is derived from the French entreprendre, which is translated as: a. To compete b. To enter and dare c. To apprehend d. To Undertake 2. The process approach to entrepreneurship seeks to: a. Explain the process of obtaining patents. b. Model the various factors that characterize the entrepreneurial process. c. Explain Intrapreneurship d. Explain the process of obtaining venture capital 3. Some countries exhibit a lot of entrepreneurial activity, but a high number of the entrepreneurial ventures seem to primarily provide self-employment for the founder. Which stage of economic development typically applies to these cultures? a. Efficiency-Driven economic Development b. Innovation-Driven economic Development c. Factor-Driven economic Development d. Opportunity-Driven economic Development 4. Joseph Schumpeter wrote about a process of entrepreneurial innovation that he termed “creative destruction.” Which of the following most closely describes the potential economic effect of the types of innovations Schumpeter was talking about? a. Shifting the production possibilities frontier b. Moving supply and demand towards equilibrium c. Changing the distribution of wealth as described by Pareto’s power law d. Entrepreneurial Arbitrage 5. What characteristics that propel entrepreneurs into success can be exhibited to such an “extreme” that it becomes a problem? a. Optimism b. High Energy c. Desires for success d. Perseverance e. Overbearing need for control 6. The decision to behave entrepreneurially is the result of the interaction of: a. A new market and a new technology b. The relevant business environment and consumer trends c. The individual’s personal entrepreneurial mind-set and opportunity d. The existence of a visible business idea and availability of startup capital

7. Which of the following statements is true of personality traits, cognition, and affect: a. All three tend to vary based on the situation controlling the entrepreneur b. In combination, they can influence the motivation of the entrepreneur to pursue an opportunity. c. They tend to be very reliable in predicting who will and who will not succeed as an entrepreneur. d. The strength of these three characteristics is determined primarily by heredity.

8. The major thrust of corporate entrepreneurship is to: a. Raise profitability b. Encourage innovation c. Encourage greater risk taking d. Increase moral 9. In attempting to create an entrepreneurial climate, the organization should consider that: a. Strict management rules work best b. Third-party contractors of labor will not be used c. Workers like independence d. The corporations that promote personal growth will attract the best people. 10. Which of the following is NOT an important characteristic for establishing an intrapreneurial climate? a. Punishment of Mistakes b. Positive Reinforcements c. Feedback d. The presence of explicit goals 11. Which of the following terms refers to the systematic evolution of a product or service into newer or larger markets? a. Radical Innovation b. Incremental Innovation c. Collective entrepreneurship d. Strategic Management 12. The person who has the opportunity to lead and “run” with an idea would be coined which of the following? a. Department Manager b. Manager c. Champion d. Visionary

13. Which of the following best illustrates the power of positive externalities? a. Increasing use of mobile devices by parents as “digital babysitters” has created a need for programs in schools to develop children’s emotional intelligence. b. Increased production of natural gas has led to more pipelines and the compressor stations required every 50-70 miles to keep the gas moving. Noise pollution from the compressor stations has impacted property values in the area. c. When organic Waste (like paper & food) decomposes in a landfill, it produces methane gas. Many landfills now capture the gas and burn it to generate electricity. d. As oil production, has grown in areas not served by pipelines, more crude oil is being shipped by rail. Lack of rail capacity has slowed grain shipments leading to concerns that there will not be enough storage for this fall’s record corn harvest. 14. Key elements in plans to create a sustainable future are likely to include which of the following? a. Eliminating the concept of waste b. Eliminating the concept of “price” c. Eliminating the concept of conservation d. Eliminating the concept of accountability 15. What are the four types of innovation? a. Analysis, synthesis, duplication, retention b. Synthesis, Extension, Retention, Analysis c. Extension, Retention, Analysis, Duplication d. Invention, Extension, Synthesis, Duplication 16. Entrepreneurs sense potential in business problems by asking: a. Who is to blame for failures? b. What about profits? c. What if and why not? d. Farfetched, unimaginative questions 17. The opportunity for entrepreneurial innovation emerges from the intersection of: a. Market Demand, Financial Capital, and Human Capital b. Knowledge, Perseverance, and Luck c. Invention, Extension, and Duplication d. Unmet Needs, Potential Solutions, and entrepreneurial cognition 18. Which of the following statements is true? a. The right brain helps people understand analogies and imagine things. b. The right brain helps people analyze and verbalize c. The left brain helps people understand analogies and imagine things. d. Right and Left brain concepts are meaningless

19. Key resources and Key activities (or process) are two components of a venture’s: a. Business Model b. Customer value proposition c. Revenue Streams d. Stakeholder Benefits 20. To be profitable, total revenue must exceed total cost. Break even analysis tells us we must look at both: a. Number of competitors and stage of the production market life-cycle. b. Price per unit and total number of units sold c. Size of the potential market and how consumer segments are defined. d. Variable costs and economies of scale. 21.) a) b) c) d)

Product/market problems include which of the following? Venture capital relationship problems Unclear business definition Concept of a team approach Assuming debt too early

22.) Which of the following type of new venture would involve the least amount of product innovation? a) Adaptive market entry b) Customer value pioneering c) Technological pioneering d) Imitative market entry 23.) a) b) c) d)

Which of the following would be most commonly used for short term financing? Angel investors Finance corporations Trade credit Leasing companies

24.) called a) b) c) d)

When accounts receivable are bought from a company for capital funding it is

25.)

Which of the following is not a type of debt financing? Private placement Trade credit Finance companies Leasing

a) b) c) d) 26.)

trade credit financing leasing factoring

The entrepreneurial spirit is unique to American and Western Europe a) False

b) True 27.) Recognition of entrepreneurs dates back to the French economist Richard Cantillion a) False b) True 28.) The macro view of entrepreneurship includes external processes that are sometimes beyond the control of the entrepreneur a) False b) True 29.) Commitment, determination, and perseverance are the only characteristics one needs to become a successful entrepreneur a) False b) True 30.) One reason that corporate entrepreneurship has become popular is because it allows corporations to tap the innovative talents of the personnel a) False b) True 31.) Firms do not need to alter management techniques to encourage corporate entrepreneurship since it tends to occur naturally a) False b) True 32.) Social entrepreneurs are known to form ventures that exploit opportunities to create social value a) False b) True 33.)

Creativity cannot be developed or improved a) False b) True

34.) Incubation in the creative process often occurs when the individual is doing something completely unrelated to the subject a) False b) True 35.) Pricing becomes aware of a product’s unique characteristics that are superior to the competition a) False b) True

36.) Feasibility analyses include the technical, market, financial, organizational, and competitive analyses a) False b) True 37.)

Timing has little to do with success or failure of a new venture a) False b) True

38.) 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 a) False b) True 39.) Generally, the larger and more successful the franchisor, the greater the franchise fee that is charged a) False b) True 40.) Equity financing is money invested in the venture with legal obligations to repay the principal amount of interest or interest rate on it a) False b) True 41.)

Describe at least 5 differences between Angel Investors and Venture Capitalists

Venture Capitalist -Goes through an application process with a committee, more on the strict scale. -Normally one big group of people -Do this for a job -Have more resources and knowledge -Have many ventures and more experience -More freedom -Not hard to find -More interest in pay back Angel Investors

-They interview, pitch idea, show what’s going to happen, more of a shark tank feel. -Different kinds such as entrp and some woise off such as micromanagement angels -Some angels do this for fun and because they have money -Some are new and don’t have a lot of knowledge -Might try and control/take over the venture -Have to find angel investor

Answer Key: 1. D 2. B 3. C 4. A 5. E 6. C 7. B 8. B 9. D 10. A 11. B 12. C 13. C 14. A 15. D 16. C 17. D 18. A 19. A 20. B

21. B 22. D 23. C 24. D 25. A 26. F 27. T 28. T 29. F 30. T 31. F 32. T 33. F 34. T 35. T 36. T 37. F 38. F 39. T 40. F...