Intro to Business Chapter 3 Exam

Question 1

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

Accepted Answer

500

Question 2

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

Accepted Answer

Silent partner

Question 3

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

Accepted Answer

Business plan

Question 4

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

Accepted Answer

Emergence of e-commerce

Question 5

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.

Question 6

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

Accepted Answer

False

Question 7

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

Accepted Answer

Merger

Question 8

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

Accepted Answer

False

Question 9

The least common type of partnership is the general partnership.

Accepted Answer

False

Question 10

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

Accepted Answer

Start-up costs

Question 11

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

Accepted Answer

Corporation

Question 12

Which of the following is an advantage of sole proprietorships?

Accepted Answer

Sales and expenses are treated as part of personal finances.

Question 13

What is the major drawback of accepting venture capital?

Accepted Answer

Sharing company control

Question 14

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

Accepted Answer

Personal resources

Question 15

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

Accepted Answer

Services

Question 16

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

Accepted Answer

Closely held

Question 17

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

Accepted Answer

False

Question 18

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

Accepted Answer

True

Question 19

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

Accepted Answer

Small business

Question 20

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

Accepted Answer

SBA

Question 21

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

Accepted Answer

Entrepreneurs

Question 22

Why do attitudes about entrepreneurship vary internationally?

Accepted Answer

Attitudes towards risk-taking are culturally determined.

Question 23

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

Accepted Answer

Market forces

Question 24

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 25

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

Accepted Answer

Public corporation

Question 26

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

Accepted Answer

Stocks

Question 27

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

Accepted Answer

Managerial incompetence or inexperience

Question 28

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

Accepted Answer

Dividends

Question 29

Who are the owners of a corporation?

Accepted Answer

Stockholders

Question 30

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

Accepted Answer

False

Question 31

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

Accepted Answer

True

Question 32

What is the biggest advantage of incorporating?

Accepted Answer

Limited liability

Question 33

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

Accepted Answer

True

Question 34

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

Accepted Answer

True

Question 35

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

Accepted Answer

Acquisition

Question 36

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

Accepted Answer

True

Question 37

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

Accepted Answer

True

Question 38

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

Accepted Answer

Venture capital companies

Question 39

What is first mover advantage?

Accepted Answer

A firm exploits an opportunity before others take advantage

Intro to Business Chapter 3 Exam

Questions 39

Intro to Business Chapter 3 Exam

Questions 39