Chapter 1—The Entrepreneurial Life

TRUE/FALSE

1. The universally accepted definition of the term small business is based on the number of people employed by the firm.

ANS: F PTS: 1 DIF: Difficulty: Easy
REF: p. 5-6 OBJ: LO: 1-2 NAT: BUSPROG: Analytic
KEY: Bloom’s: Comprehension

2. According to the text, the term entrepreneur refers to small business founders only.

ANS: F PTS: 1 DIF: Difficulty: Easy
REF: p. 6 OBJ: LO: 1-2b NAT: BUSPROG: Analytic
KEY: Bloom’s: Knowledge

3. The term bootstrapping refers to the practice of bartering rather than buying with cash or credit.

ANS: F PTS: 1 DIF: Difficulty: Moderate
REF: p. 6 OBJ: LO: 1-2b NAT: BUSPROG: Analytic
KEY: Bloom’s: Knowledge

4. Successful entrepreneurs should be aware of their strengths and weaknesses and be willing to strive toward goals.

ANS: T PTS: 1 DIF: Difficulty: Easy
REF: p. 9 OBJ: LO: 1-3 NAT: BUSPROG: Analytic
KEY: Bloom’s: Knowledge

5. Entrepreneurs should avoid hiring mediocre people.

ANS: T PTS: 1 DIF: Difficulty: Easy
REF: p. 9 OBJ: LO: 1-3 NAT: BUSPROG: Analytic
KEY: Bloom’s: Knowledge

6. According to the text, managers who buy out founders of existing firms may be classified as entrepreneurs.

ANS: T PTS: 1 DIF: Difficulty: Easy
REF: p. 9 OBJ: LO: 1-3a NAT: BUSPROG: Analytic
KEY: Bloom’s: Knowledge

7. Franchisees are not really entrepreneurs because they have a contract with a franchising organization.

ANS: F PTS: 1 DIF: Difficulty: Moderate
REF: p. 10 OBJ: LO: 1-3b NAT: BUSPROG: Analytic
KEY: Bloom’s: Analysis

8. An entrepreneurial team consists of the owner, the financier, and one key employee.

ANS: F PTS: 1 DIF: Difficulty: Moderate
REF: p. 10-11 OBJ: LO: 1-3c NAT: BUSPROG: Analytic
KEY: Bloom’s: Application

9. To be classified as a social entrepreneurship, a business must have a triple bottom line.

ANS: F PTS: 1 DIF: Difficulty: Moderate
REF: