Page 184 - Introduction to Business

158 PART 1 The Nature of Contemporary Business

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True/False Questions 2. A person within a large corporation who
Please indicate if the following statements are true or takes responsibility to develop a new product
false: through innovation and risk taking is
referred to as a(an)
1. The competitive process of business success
and failure proposed by Joseph Schumpeter a. entrepreneur.
is known as creative destruction. b. small business owner.
c. intrapreneur.
2. Computer and telecommunications technol-
d. inventor.
ogy is increasing the number of home busi-
e. innovator.
nesses and opening up new working oppor-
tunities for disabled persons. 3. Government can support small business by
3. Entrepreneurs can earn a salary from run- a. reducing the number of government
ning a small business but are not allowed to websites.
earn extra income from the net profits of the b. making more complex tax rules.
firm. c. diminishing access to financial
resources.
4. SCORE is an organization made up of retired
d. decreasing access to important informa-
executives that seeks to help small busi-
tion.
nesses get professional counseling services.
e. reducing burdensome regulation.
5. Ethnic diversity is an important ingredient in
4. Which of the following is not a personal
building a more prosperous small business
quality of an entrepreneur?
sector.
a. Commitment to make the business prof-
6. Seed money is the net profits earned by a
itable
small business firm.
b. Enjoying working for her- or himself
7. A company credo or code is important as a
c. Self-confidence to be able to run the busi-
marketing jingle or catchy phrase to attract
ness
customers.
d. Fear of failure
8. Risks of losses that severely cripple the busi- e. Risk taker willing to take the plunge and
ness or even cause bankruptcy are known as start a small business
business risks.
5. Which of the following is not an essential
9. Disability insurance can be purchased to component of a small business plan?
cover longer-term expenses resulting from a
a. Common stock
chronic medical condition that prevents a
b. Vision, or mission, statement
person from continuing to work.
c. Goals
10. A severe recession is known as a d. Strategies
depression. e. Overview of the company
6. Leadership entails
Multiple-Choice Questions
a. avoiding enthusiasm and confidence.
Choose the best answer.
b. reducing decision making.
1. Some experts consider a small business with
c. decreasing effective communication with
less than five employees to be a
others.
a. partnership. d. getting all other people to do the work.
b. microbusiness. e. motivating others to join in the vision of
c. sole proprietorship. the firm.
d. C corporation.
e. S corporation.

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