Chapter 1
Entrepreneurship: A Field, an Activity - and a Way of Life
TRUE/FALSE
1. The process of entrepreneurship involves a chain of events and activities that takes place
over a period of time.
ANS: T PTS: 1 DIF: E OBJ: 1
2. Recognizing opportunities for creating or developing something new can only occur within
existing organizations.
ANS: F PTS: 1 DIF: M OBJ: 1
3. Entrepreneurship is a field of study that seeks to understand how opportunities to create
new products or services arise and are discovered by specific persons, who then use various
means to exploit or develop them.
ANS: T PTS: 1 DIF: E OBJ: 1|3
4. The entrepreneurial process begins when one or more persons recognize an opportunity---
the potential to create something new that has emerged from a complex pattern of changing
conditions.
ANS: T PTS: 1 DIF: E OBJ: 3
5. A business plan is a detailed description of how a company plans to develop its new
venture.
ANS: T PTS: 1 DIF: E OBJ: 3
, 6. Entrepreneurs cause an increase in unemployment, taking away jobs from the working
class.
ANS: F PTS: 1 DIF: E OBJ: 2
7. Experimentation plays a large part in an entrepreneur’s success and is used all of the time in
the study of entrepreneurship.
ANS: F PTS: 1 DIF: M OBJ: 6
8. The term “Theory” refers to efforts to go beyond merely describing various phenomena to
the point at which we can explain them.
ANS: T PTS: 1 DIF: M OBJ: 7
9. One reason that more people are choosing to be entrepreneurs, rather than entering the
workforce through pre-existing companies, is because many people in the younger
generation prefer a job allowing them independence and freedom.
ANS: T PTS: 1 DIF: E OBJ: 2
10. In the process of developing a theory on entrepreneurship, the theory is eventually either
proven or rejected, and the results are accepted as being absolute.
ANS: F PTS: 1 DIF: M OBJ: 7
11. A person is conducting research concerning a certain theory about entrepreneurship. The
findings of the research contradict the theory. This proves the theory to be false.
ANS: F PTS: 1 DIF: M OBJ: 7
12. Entrepreneurship refers to developing a new product or service that is revolutionary, or
earth-shaking, rather than developing a less noteworthy product or service.
ANS: F PTS: 1 DIF: E OBJ: 1
, 13. The definition of entrepreneurship includes the creation of something new. It does not
include the requirement that the new thing makes it to market.
ANS: F PTS: 1 DIF: E OBJ: 1
14. The example in the textbook of Lorraine Santoli creating a new dispenser for tissues to be
used in her car is not an example of entrepreneurship because it is not something “hot” or
remarkable.
ANS: F PTS: 1 DIF: E OBJ: 1
15. Entrepreneurship refers to the process of bringing something that is not now being
produced to the marketplace.
ANS: T PTS: 1 DIF: E OBJ: 1
16. In the United States, small businesses, those with less than 500 employees, make up only
about 1% of all employers.
ANS: F PTS: 1 DIF: E OBJ: 2
17. Companies like Expedia.com probably could not have been started ten or more years ago
because the technological, economic, and social forces were not right to present the
opportunity to start such a company.
ANS: T PTS: 1 DIF: E OBJ: 3
MULTIPLE CHOICE
1. Of the following, which one is probably NOT and example of an entrepreneur.
a. After years of working as a mechanic, a middle-aged man comes up with the idea of
processing old tires and transforming them into border for flower gardens.
b. An elderly woman who enjoys entertaining in her home and providing home-made
, appetizers decides to offer her services to parties and become a caterer.
c. A scientist involved in research on the biochemistry of life makes breakthrough
discoveries that advance the frontiers of his field, but has no interest in identifying
the practical uses of his findings.
d. A computer scientist develops a new software program that is better then any others
currently on the market. The scientist seeks capital to start a company to develop
and sell this product.
e. After retiring from the army, an officer develops the idea of purchasing retired
amphibious vehicles from the government and using them to start a company that
specializes in offering tours of remote wilderness areas.
ANS: C PTS: 1 DIF: M OBJ: 1|4
NOT: Thinking
2. A person who creates something new while working inside an existing company is known
as a/an
a. internal entrepreneur.
b. nonproprietary thinker.
c. technology officer.
d. intrapreneur..
e. traditional entrepreneur.
ANS: D PTS: 1 DIF: M OBJ: 1
NOT: Recall
3. In order to understand entrepreneurship as a process, it is essential to consider which of
the following factors?
a. The economic, technological, and social conditions from which opportunities rise.
b. The people who recognize technological, economic, and social conditions from which
opportunities rise
c. The business techniques and legal structures used to develop opportunities.
Entrepreneurship: A Field, an Activity - and a Way of Life
TRUE/FALSE
1. The process of entrepreneurship involves a chain of events and activities that takes place
over a period of time.
ANS: T PTS: 1 DIF: E OBJ: 1
2. Recognizing opportunities for creating or developing something new can only occur within
existing organizations.
ANS: F PTS: 1 DIF: M OBJ: 1
3. Entrepreneurship is a field of study that seeks to understand how opportunities to create
new products or services arise and are discovered by specific persons, who then use various
means to exploit or develop them.
ANS: T PTS: 1 DIF: E OBJ: 1|3
4. The entrepreneurial process begins when one or more persons recognize an opportunity---
the potential to create something new that has emerged from a complex pattern of changing
conditions.
ANS: T PTS: 1 DIF: E OBJ: 3
5. A business plan is a detailed description of how a company plans to develop its new
venture.
ANS: T PTS: 1 DIF: E OBJ: 3
, 6. Entrepreneurs cause an increase in unemployment, taking away jobs from the working
class.
ANS: F PTS: 1 DIF: E OBJ: 2
7. Experimentation plays a large part in an entrepreneur’s success and is used all of the time in
the study of entrepreneurship.
ANS: F PTS: 1 DIF: M OBJ: 6
8. The term “Theory” refers to efforts to go beyond merely describing various phenomena to
the point at which we can explain them.
ANS: T PTS: 1 DIF: M OBJ: 7
9. One reason that more people are choosing to be entrepreneurs, rather than entering the
workforce through pre-existing companies, is because many people in the younger
generation prefer a job allowing them independence and freedom.
ANS: T PTS: 1 DIF: E OBJ: 2
10. In the process of developing a theory on entrepreneurship, the theory is eventually either
proven or rejected, and the results are accepted as being absolute.
ANS: F PTS: 1 DIF: M OBJ: 7
11. A person is conducting research concerning a certain theory about entrepreneurship. The
findings of the research contradict the theory. This proves the theory to be false.
ANS: F PTS: 1 DIF: M OBJ: 7
12. Entrepreneurship refers to developing a new product or service that is revolutionary, or
earth-shaking, rather than developing a less noteworthy product or service.
ANS: F PTS: 1 DIF: E OBJ: 1
, 13. The definition of entrepreneurship includes the creation of something new. It does not
include the requirement that the new thing makes it to market.
ANS: F PTS: 1 DIF: E OBJ: 1
14. The example in the textbook of Lorraine Santoli creating a new dispenser for tissues to be
used in her car is not an example of entrepreneurship because it is not something “hot” or
remarkable.
ANS: F PTS: 1 DIF: E OBJ: 1
15. Entrepreneurship refers to the process of bringing something that is not now being
produced to the marketplace.
ANS: T PTS: 1 DIF: E OBJ: 1
16. In the United States, small businesses, those with less than 500 employees, make up only
about 1% of all employers.
ANS: F PTS: 1 DIF: E OBJ: 2
17. Companies like Expedia.com probably could not have been started ten or more years ago
because the technological, economic, and social forces were not right to present the
opportunity to start such a company.
ANS: T PTS: 1 DIF: E OBJ: 3
MULTIPLE CHOICE
1. Of the following, which one is probably NOT and example of an entrepreneur.
a. After years of working as a mechanic, a middle-aged man comes up with the idea of
processing old tires and transforming them into border for flower gardens.
b. An elderly woman who enjoys entertaining in her home and providing home-made
, appetizers decides to offer her services to parties and become a caterer.
c. A scientist involved in research on the biochemistry of life makes breakthrough
discoveries that advance the frontiers of his field, but has no interest in identifying
the practical uses of his findings.
d. A computer scientist develops a new software program that is better then any others
currently on the market. The scientist seeks capital to start a company to develop
and sell this product.
e. After retiring from the army, an officer develops the idea of purchasing retired
amphibious vehicles from the government and using them to start a company that
specializes in offering tours of remote wilderness areas.
ANS: C PTS: 1 DIF: M OBJ: 1|4
NOT: Thinking
2. A person who creates something new while working inside an existing company is known
as a/an
a. internal entrepreneur.
b. nonproprietary thinker.
c. technology officer.
d. intrapreneur..
e. traditional entrepreneur.
ANS: D PTS: 1 DIF: M OBJ: 1
NOT: Recall
3. In order to understand entrepreneurship as a process, it is essential to consider which of
the following factors?
a. The economic, technological, and social conditions from which opportunities rise.
b. The people who recognize technological, economic, and social conditions from which
opportunities rise
c. The business techniques and legal structures used to develop opportunities.
