Chapter 10 Managing New Venture Formation and Entrepreneurship MULTIPLE CHOICE 1 An entrepreneur does all of the following EXCEPT a organize b plan c hire professional managers d assume risk e operate ANS C NAT AACSB A PTS 1 MSC Type Def REF p 300 OBJ 10 1 2 Alan McKim started Clean Harbors an environmental cleanup firm that specializes in toxic waste cleanup He is best classified as a n a intrapreneur b franchiser c venture capitalist d entrepreneur e franchisee ANS D NAT AACSB R PTS 1 MSC Type App REF p 300 OBJ 10 1 3 Which of the following describes an entrepreneur a Richard Ames an investor in Red Raider which is run by his two partners b Chad Olsen who hired a consulting firm to research his business idea and help him set up Help Doc which he now manages c James Hill who owns Midtown TV but works as a Motorola engineer d Sidney Pell who runs Midtown TV for its owner James Hill e None of these choices ANS B NAT AACSB R PTS 1 MSC Type App REF p 300 OBJ 10 1 4 Karyn Cortani developed the idea to make Tohos pantyhose with the foot shaped like a mitten so they can be worn with thong sandals She filed a patent and researched production She now sells Tohos on the Internet She is an example of a n a intrapreneur b leaseholder c venture capitalist d entrepreneur e franchisee ANS D NAT AACSB R Chapter 10 PTS 1 MSC Type App REF p 300 OBJ 10 1 1 2011 Cengage Learning All Rights Reserved May not be scanned copied or duplicated or posted to a publicly accessible website in whole or in part 5 Which of the following is NOT an example of an entrepreneur a Madeline runs a neighborhood lemonade stand by herself b Diane Molberg started By Request a successful home bakery business that guarantees that any item it sells is no more than 24 hours old c Elmer Olsen created the successful Bayfield Apple Jam Company using a recipe from his wife and some investment capital d Cindy has a yard sale once a year e Donna Cook wanted to start a little home business 10 years ago now she has a company that produces and markets more than 150 dry cooking mixes ANS D NAT AACSB R PTS 1 MSC Type App REF p 300 OBJ 10 1 6 Kristen owns and operates a photography studio She has no employees She is a n a small business owner b intrapreneur c venture capitalist d networker e leaseholder ANS A NAT AACSB R PTS 1 MSC Type App REF p 300 OBJ 10 1 7 A small business a is publicly owned b creates jobs faster than big businesses c has less than 100 employees d is easily discernible from a big business e has sales so small it cannot influence its environment ANS E NAT AACSB A PTS 1 MSC Type Def REF p 300 OBJ 10 1 8 Which of the following statements comparing small businesses to large businesses is FALSE a More new jobs are created by small than by large businesses b Large businesses show better financial performance than small businesses c Small businesses represent the majority of new businesses started each year d Small businesses can typically produce and deliver specialty products more efficiently than large businesses e Small businesses outnumber large businesses by nearly 100 to 1 ANS B NAT AACSB R PTS 1 MSC Type Comp REF p 301 OBJ 10 2 9 Which of the following is NOT generally considered to be a role performed by small businesses a Creation of new jobs b Development of new products c Manufacture of materials for large businesses d Distribution of products made by large businesses e Provision of capital for expansion of large businesses ANS E NAT AACSB R Chapter 10 PTS 1 MSC Type Comp REF p 301 OBJ 10 2 2 2011 Cengage Learning All Rights Reserved May not be scanned copied or duplicated or posted to a publicly accessible website in whole or in part 10 In terms of the number of new jobs formed each year how does small business compare to big business a Small business creates more than 99 percent of the new jobs b Big business loses the most jobs each year c Small business was recently passed by big business in creating new jobs d Business success creates jobs regardless of size e Big business is responsible for nearly all of the new jobs created ANS C NAT AACSB R PTS 1 MSC Type Comp REF p 302 OBJ 10 2 11 Which of these statements comparing large and small businesses is TRUE a Big businesses outnumber small businesses by a wide margin b Tax policies favor medium sized businesses c Small businesses show consistently lower financial performance than big businesses d Business success creates jobs regardless of size e Small business formations are on the decline but the rate for big businesses is increasing ANS D NAT AACSB R PTS 1 MSC Type Comp REF p 302 OBJ 10 2 12 While watching her Dad cook bacon in the microwave 10 year old Abby Fleck asked Wouldn t it be less messy if you hung the bacon to cook After breakfast she and her Dad went to the basement and created the Makin Bacon a gadget for making bacon cooking less messy Abby her parents and her grandparents own and operate a company that makes and sells Makin Bacon trays Her first big customer was Armour Bacon which purchased the gadget to sell as a premium on its packages of bacon This is a small business that has contributed by its a innovation and its importance to a big company b financial performance and impact on its external environment c innovation and its impact on the internal environment of Armour d job creation innovation and importance to big business as a whole e job creation and innovation ANS A NAT AACSB R PTS 1 MSC Type App REF p 303 OBJ 10 2 13 If an entrepreneur were considering a new business which of the following would be a DESIRABLE characteristic of the industry being considered a Several companies are engaged in highly competitive advertising which indicates that the product is desirable b The new company will sell a newly patented invention that is not yet well known but is expected to dominate the market c Start up costs are high so only a few companies are in business d The new company will be able to sell only to selected buyers e Customers have substitute products from which to choose if the new company cannot produce the products as rapidly as needed ANS B NAT AACSB R Chapter 10 PTS 1 MSC Type Comp REF p 305 OBJ 10 3 3 2011 Cengage Learning All Rights Reserved May not be scanned copied or duplicated or posted to a publicly accessible website in whole or in part 14 In which of the following industries are you most likely to find small business success …