THE ENTREPRENEUR
TRUE/FALSE
2.1 Experts agree on the definition of entrepreneur.
Answer: F
2.2 The earliest reference to the term of entrepreneurship was in the early 1900s.
Answer: F
2.3 The earliest references to the term “entrepreneurship” were developed by
management experts.
Answer: F
2.4 Research on entrepreneurs in the later 1990s concerned the entrepreneur’s
personality.
Answer: T
2.5 The process of “creative destruction” states that entrepreneurs are a force for
change.
Answer: T
2.6 Recently, there has been a focus on defining the entrepreneur by entrepreneurial
behavior and actions.
Answer: T
2.7 The entrepreneurial process is relatively rare in the United States.
Answer: F
2.8 The classic entrepreneur is one who starts a new business based on an existing
concept.
Answer: F
2.9 The classic entrepreneur is one who develops a new product or idea and builds a
business around the new concept.
Answer: T
2.10 The “Big 5” personality trait most associated with entrepreneurship is
conscientiousness.
Answer: F
2.11 The four spheres of influence on entrepreneurs are the individual, the
ethnocultural environment, the circumstances in society, and the entrepreneur’s
ability to make money.
Answer: F
2.12 Experts disagree on whether entrepreneurship can be taught.
Answer: T
2.13 Many successful entrepreneurs succeeded only after they had failed several times.
Answer: T
2.14 An entrepreneur with an internal locus of control believes that success or failure
depends on his/her own actions.
Answer: T
2.15 A person with an external locus of control would believe that outside factors (fate,
the economy, etc.) determine one’s success.
Answer: T
2.16 Entrepreneurs usually take high risks.
Answer: F
2.17 Entrepreneurs have a high need for achievement.
Answer: F
2.18 Self-efficacy is a person’s belief in his or her capability to perform a task.
Answer: T
2.19 The concept of thought self-leadership states that people who think of themselves
as leaders generally become one.
Answer: F
2.20 The concept of thought self-leadership states that people develop functional and
dysfunctional habits in the ways they think.
Answer: T
2.21 According to thought self-leadership, the dysfunctional way of thinking is known
as “obstacle thinking.”
Answer: T
2.22 According to thought self-leadership, opportunity thinking is likely to decrease a
person’s self-efficacy.
Answer: F
2.23 The effects of culture and traits may be intertwined since different cultures have
varying values and beliefs.
Answer: T
2.24 Culture affects the image or status of entrepreneurs.
Answer: T
2.25 If an immigrant becomes an entrepreneur because he or she is unable to find a job,
this is an adaptive-response behavior.
Answer: T
2.26 Advantages of entrepreneurship include autonomy, the challenge of a start-up,
and more control over personal finances.
Answer: T
2.27 Disadvantages of entrepreneurship include personal sacrifices, the burden of
responsibility, and little margin for error.
Answer: T
2.28 Entrepreneurs often work long hours resulting in a strain on family relationships.
Answer: T
2.29 For many entrepreneurs the challenge of a start-up provides a significant feeling
of achievement.
Answer: T
MULTIPLE CHOICE
2.30 Concerning the concept of entrepreneurship and the individual who is called an
entrepreneur, there
a. is substantial disagreement.
b. is no disagreement.
c. is unanimous agreement.
d. has been little discussion.
Answer: a
2.31 The earliest reference to the term entrepreneurship was in the
a. 1700s.
b. 1800s.
c. 1900s.
d. 21st century.
Answer: a
2.32 Early definitions of entrepreneurs were developed by
a. marketing experts.
b. management experts.
c. economists.
d. personnel managers.
Answer: c
2.33 The concept of “creative destruction” states that
a. entrepreneurs are a force for change.
b. entrepreneurship has an uncertain financial return.
c. entrepreneurs must risk financial capital.
d. entrepreneurs have unique personality traits.
Answer: a
2.34 Entrepreneurship has been defined as a process activity that includes
a. an opportunity.
b. an organizational context.
c. innovation.
d. all of the above.
Answer: d
2.35 Which of the following is false?
a. The entrepreneurial process is common in the United States.
b. Entrepreneurial “flashes of genius” are rare.
c. Many entrepreneurs start a business while they are employed elsewhere.
d. The founders of Hewlett-Packard and Sony Corporation had well-defined
product strategies before the companies began operations.
Answer: d
2.36 James Collins, the columnist for Inc. Magazine suggests that entrepreneurs
consider the business the ultimate product. This may be advantageous because
a. it reduces risk.
b. the business is more likely to survive if the first product-concept fails.
c. it reduces some of the ambiguity related to entrepreneurship.
d. it increases the entrepreneur’s willingness to take risks.
Answer: b
2.37 If entrepreneurship is considered a process activity, which of the following is not
part of the process?
a. An opportunity
b. Resources
c. an organizational context
d. All of the above
Answer: d
2.38 Entrepreneurial “flashes of genius” are
a. the basis for most business start-ups.
b. rare.
c. the basis for most new products.
d. common in all entrepreneurs.
Answer: b
2.39 Sony Corporation and Hewlett-Packard are examples of companies that
a. were started with a clear business purpose.
b. had a successful start but eventually failed.
c. started without a specific business purpose.
d. had no start-up risk.
Answer: c
2.40 Entrepreneurial activities include
a. starting a new business based on a new concept.
b. starting a new business based on an existing concept.
c. buying an existing business.
d. all of the above.
Answer: d
2.41 If someone starts a convenience food store, this is an example of a(n)
a. new concept/new business.
b. existing concept/new business.
c. existing concept/existing business.
d. new concept/existing business.
Answer: b
2.42 If someone buys a business and does not make any major changes this is an
example of
a. new concept/new business.
b. existing concept/new business.
c. existing concept/existing business.
d. new concept/existing business.
Answer: c
2.43 Which of the following is an influence in determining entrepreneurial behavior?
a. Individual or self
b. Ethnocultural environment
c. Circumstances in society
d. All of the above
Answer: d
2.44 Which of the following is not an influence in determining entrepreneurial
behavior?
a. The individual or self.
b. The ethnocultural environment.
c. The entrepreneur’s relationship with peers.
d. Circumstances in society.
Answer: c
2.45 Experts
a. agree that anyone can be taught to be an entrepreneur.
b. believe that entrepreneurship can be taught only to someone who is under 20
years of age.
c. believe that entrepreneurship can be taught only to those who are over 20
years of age.
d. disagree on whether entrepreneurship can be taught.
Answer: d
2.46 When vocational counselors help people decide on a career choice they may
consider
a. basic values and beliefs.
b. personality traits.
c. the person’s self-concept.
d. all of the above.
Answer: d
2.47 The “Big 5” personality characteristic most associate with entrepreneurship is
a. extraversion.
b. conscientiousness.
c. agreeableness.
d. openness.
Answer: d
2.48 The “Big 5” personality trait most associated with entrepreneurship is
a. openness.
b. extraversion.
c. conscientiousness.
d. neuroticism.
Answer: a
2.49 Which of the following is not true concerning entrepreneurs and risk?
a. They usually take high risks.
b. They define risks early in the start-up process.
c. They minimize risks to every extent possible.
They see risk differently than the general public.
Answer: a
2.50 If an entrepreneur has an internal locus of control this means that he/she
a. minimizes risk.
b. feels comfortable in an unstructured situation.
c. believes that success or failure depends on his/her own actions.
d. sees changes as opportunities.
Answer: c
2.51 Which of the following is a common entrepreneurial trait?
a. A passion for the business
b. Persistence despite failure
c. Self-confidence
d. All of the above
Answer: d
2.52 It is common for entrepreneurs to learn about an industry before starting a
business. This is often done by
a. reading trade magazines.
b. talking to friends.
c. going to training programs.
d. working for someone else.
Answer: d
2.53 People who believe that the economy determines one’s success or failure have
a(n)
a. external locus of control.
b. money motivation.
c. tolerance for ambiguity.
d. achievement motive.
Answer: a
2.54 Entrepreneurs would best be described as risk
a. seekers.
b. avoiders.
c. managers.
d. loving.
Answer: c
2.55 Walt Disney and Henry Ford are two examples of entrepreneurs who
a. had a “flash of genius.”
b. were financially motivated.
c. succeeded only after failing several times.
d. were poor managers of risk.
Answer: c
2.56 Entrepreneurs
a. search for change.
b. respond to change.
c. exploit change as an opportunity.
d. all of the above.
Answer: d
2.57 Most successful entrepreneurs have a tolerance for ambiguity. This means that
they
a. minimize risk.
b. feel comfortable with uncertainty.
c. believe that success or failure depends on his/her own actions.
d. see changes as opportunities.
Answer: b
2.58 Entrepreneurs have a high need for
a. achievement.
b. making money.
c. structure.
d. taking risks.
Answer: a
2.59 If a person feels comfortable even in an uncertain situation the person has a
tolerance for
a. control.
b. achievement.
c. ambiguity.
d. independence.
Answer: c
2.60 Entrepreneurs
a. are self motivated.
b. have a high need for achievement.
c. are often perfectionists.
d. all of the above.
Answer: d
2.61 Which of the following is a common entrepreneurial trait?
a. Viewing changes as opportunities
b. A tolerance for ambiguity
c. A high need for achievement
d. All of the above
Answer: d
2.62 Scanning the environment refers to the process of
a. researching information about the business environment.
b. nurturing the entrepreneurial spirit.
c. studying entrepreneurship.
d. motivating oneself.
Answer:
2.63 Which is not true of entrepreneurs?
a. Sense that time is passing quickly
b. Recognize opportunities that other people do not see
c. See the “big picture” when others see only the parts
d. Are primarily motivated by money
Answer: d
2.64 Which of the following has been identified as a reason for being self employed?
a. To use personal skills and abilities
b. To gain control over one’s life
c. To build something for the family
d. All of the above
Answer: d
2.65 A person’s belief in his capability to perform a task is known as
a. ethnocultural beliefs.
b. scanning the environment.
c. self-efficacy.
d. self-determination.
Answer: c
2.66 Thought self-leadership states that
a. leaders must think of themselves as everyone’s peer.
b. you must learn to lead yourself before you lead others.
c. people develop habits in the ways they think.
d. a person cannot lead if others do not see him as a leader.
Answer: c
2.67 Opportunity thinking is considered a
a. functional habit.
b. bad habit.
c. risky habit.
d. neurotic habit.
Answer: a
2.68 A dysfunctional way of thinking is
a. obstacle thinking.
b. opportunity thinking.
c. optimistic thinking.
d. positive thinking.
Answer: a
2.69 Thought patterns affect
a. perceptions.
b. the way a person processes information.
c. choices a person makes.
d. all of the above.
Answer: d
2.70 Which of the following is true?
a. Members of some ethnocultural groups have a higher rate of business
ownership than other groups.
b. Individuals from different cultural groups do not all become entrepreneurs for
the same reason.
c. Studies have shown that different cultures have varying values and beliefs.
d. All of the above.
Answer: d
2.71 A habit of “opportunity thinking” may make a person more likely to
a. engage in risky behavior.
b. pursue entrepreneurship.
c. have less self-efficacy.
d. focus on negative aspects of a problem.
Answer: b
2.72 Self-efficacy is a person’s belief in
a. opportunities.
b. the importance of perfectionism.
c. his ability to perform a task.
d. the importance of persistence.
Answer: c
2.73 Which of the following is considered an adaptive-response behavior?
a. An immigrant becoming an entrepreneur because of a lack of language and
job skills
b. An entrepreneur who had planned all his life to own a business
c. Someone who quits a good job to become an entrepreneur
d. All of the above
Answer: a
2.74 Advantages of entrepreneurship include
a. autonomy.
b. the challenge of a start-up.
c. control over personal financial situation.
d. all of the above
Answer: d
2.75 Advantages of entrepreneurship include autonomy. This is
the
a. freedom and independence to make decisions.
b. need for achievement.
c. need to be a jack of all trades.
d. process of starting a business.
Answer: a
2.76 Small businesses often have little margin for error because
a. the entrepreneur does not have the skills to turn the company around.
b. the companies often operate on a thin financial margin.
c. mistakes are a sign of poor management.
d. it decreases the entrepreneur’s autonomy.
Answer: b
