Intro to Business Chapter 3 Exam

Question 1

What type corp. issues stock that is held by only a few people & not available to the public?

Accepted Answer

Closely held

Question 2

U.S. Department of Commerce considers a business small if it has fewer than how many employees?

Accepted Answer

500

Question 3

What type of partner invests all funds in the organization but plays no role in its management?

Accepted Answer

Silent partner

Question 4

2 raise revenue, what can business issue & sell 2 those wishing 2 own some of the organization?

Accepted Answer

Stocks

Question 5

Most successful entrepreneurs have a strong desire to be their own bosses.

Accepted Answer

True

Question 6

What is considered to be a significant disadvantage of owning a franchise?

Accepted Answer

Start-up costs

Question 7

Low start-up costs and tax benefits are advantages of sole proprietorships.

Accepted Answer

True

Question 8

Groups of small investors seeking to make profits on companies with rapid growth potential?

Accepted Answer

Venture capital companies

Question 9

Which of the follow BEST defines those who assume the risk of business ownership?

Accepted Answer

Entrepreneurs

Question 10

Most businesses in the United States are large businesses with more than 500 employees.

Accepted Answer

False

Question 11

What is the major drawback of accepting venture capital?

Accepted Answer

Sharing company control

Question 12

Loans are the most important sources of money for new businesses.

Accepted Answer

False

Question 13

The least common type of partnership is the general partnership.

Accepted Answer

False

Question 14

Who are the owners of a corporation?

Accepted Answer

Stockholders

Question 15

What is the MOST important source of money for new business start-ups?

Accepted Answer

Personal resources

Question 16

Which of the following factors MOST contributes to small business failure?

Accepted Answer

Managerial incompetence or inexperience

Question 17

Which one of the industry groups is the fastest growing segment of small business enterprise?

Accepted Answer

Services

Question 18

What is the biggest advantage of incorporating?

Accepted Answer

Limited liability

Question 19

What is first mover advantage?

Accepted Answer

A firm exploits an opportunity before others take advantage

Question 20

Lending institutions are more likely to help finance the purchase of an existing business

Accepted Answer

True

Question 21

A joint venture occurs when partners share ownership of a new enterprise.

Accepted Answer

True

Question 22

Business is legally considered a separate entity from its owners & is liable for its own debts?

Accepted Answer

Corporation

Question 23

In a small business, who determines prices for wholesalers and customers?

Accepted Answer

Market forces

Question 24

Small businesses produce more patents per employee than large patenting firms.

Accepted Answer

True

Question 25

Which of the following is an advantage of sole proprietorships?

Accepted Answer

Sales and expenses are treated as part of personal finances.

Question 26

The Small Business Administration is the government agency charged with owning small businesses

Accepted Answer

False

Question 27

Franchisees may be obligated to contribute a percentage of sales to parent corporations.

Accepted Answer

True

Question 28

Why do attitudes about entrepreneurship vary internationally?

Accepted Answer

Attitudes towards risk-taking are culturally determined.

Question 29

Which of the following occurs when two firms combine to create a new company?

Accepted Answer

Merger

Question 30

What type of company has stock that is widely held & available for sale to the general public?

Accepted Answer

Public corporation

Question 31

Which of the following helps entrepreneurs gain skills essential for running a business?

Accepted Answer

SBA

Question 32

What is the term for the profits that are distributed to all owners of a corporation?

Accepted Answer

Dividends

Question 33

An investor is not interested in owning their own business, why do they need to understand it?

Accepted Answer

To assess the market potential for up-and-coming businesses

Question 34

What does an entrepreneur use to summarize business strategy for a proposed new venture?

Accepted Answer

Business plan

Question 35

What type of ownership is created when a firm buys another outright?

Accepted Answer

Acquisition

Question 36

Which entity is defined as independent and has little influence on its market?

Accepted Answer

Small business

Question 37

An organization's president is usually responsible for the overall performance of the firm.

Accepted Answer

False

Question 38

Which of the following is the MOST significant recent trend in small-business start-ups?

Accepted Answer

Emergence of e-commerce

Question 39

The advantage to starting a business from scratch instead of buying an existing business is?

Accepted Answer

There are no ill-effects from the previous owner.

Intro to Business Chapter 3 Exam

Questions 39

Intro to Business Chapter 3 Exam

Questions 39