Test Bank for
Essentials of Entrepreneurship and
Small Business Management
Revised by Susan Schanne
Essentials of
Entrepreneurship
and Small Business
Management
Tenth Edition
Norman M. Scarborough
,Essentials of Entrepreneurship and Small Business Management, 10e (Scarborough)
Chapter 1 The Foundations of Entrepreneurship
1) Globally, how does the United States compare with other countries in terms of entrepreneurial
activity?
A) They lag behind other high-income economies at just 10.8 percent of new startups.
B) They have fewer, but more successful startups.
C) They are well above the global average of 12.9 percent.
D) They received more backing and resources from the government.
Answer: C
Diff: 1
Learning Obj.: 1.1 Define the role of the entrepreneur in business in the United States and
around the world.
AACSB: Reflective Thinking
2) According to the Kauffman Foundation, about how many entrepreneurs in the United States
start businesses of their own because they cannot find jobs elsewhere?
A) 7 percent
B) 19 percent
C) 32 percent
D) 43 percent
Answer: B
Diff: 2
Learning Obj.: 1.1 Define the role of the entrepreneur in business in the United States and
around the world.
AACSB: Reflective Thinking
3) How has the downsizing trend among large companies impacted business in the United
States?
A) The rate of technological advancement has slowed.
B) Large firms take advantage of their hierarchical structure to exploit new markets.
C) Large firms have better technology that leads to competitive advantage.
D) Small, nimble competitors are better able to exploit niche markets.
Answer: D
Diff: 2
Learning Obj.: 1.1 Define the role of the entrepreneur in business in the United States and
around the world.
AACSB: Analytical Thinking
1
Copyright © 2026 Pearson Education, Inc.
,4) Today, what matters most in the economic structure influencing the United States?
A) The growth of small businesses
B) Long-term profitability
C) Factors of production
D) Knowledge and information
Answer: D
Diff: 2
Learning Obj.: 1.1 Define the role of the entrepreneur in business in the United States and
around the world.
AACSB: Analytical Thinking
5) The gig economy makes up 58 percent of the U.S. workforce.
Answer: FALSE
Diff: 1
Learning Obj.: 1.1 Define the role of the entrepreneur in business in the United States and
around the world.
AACSB: Application of Knowledge
6) One study conducted by the Global Entrepreneurship Monitor (GEM) reports that nearly one
in five people in the United States is working to start a business.
Answer: TRUE
Diff: 2
Learning Obj.: 1.1 Define the role of the entrepreneur in business in the United States and
around the world.
AACSB: Application of Knowledge
7) According to Gallup's Builder Profile assessment, how do successful entrepreneurs manage
risk?
A) They understand that the nature of entrepreneurship is based on risk.
B) They will take risks only to increase their probability of success.
C) They are willing to take higher risks for higher rewards.
D) They systematically work to eliminate it.
Answer: D
Diff: 2
Learning Obj.: 1.2 Describe the entrepreneurial profile.
AACSB: Application of Knowledge
2
Copyright © 2026 Pearson Education, Inc.
, 8) Which of the following best defines an entrepreneur?
A) One who is willing to implement a business concept and then move on if it does not meet
immediate expectations.
B) One who understands the process of developing an idea and hires small companies to turn that
idea into a viable business concept.
C) One who knows that the concept they are about to develop will result in a profitable business.
D) One who creates a new business in the face of risk and uncertainty by assembling the
necessary resources to capitalize on identified opportunities.
Answer: D
Diff: 2
Learning Obj.: 1.2 Describe the entrepreneurial profile.
AACSB: Analytical Thinking
9) Which of following is not a characteristic of the typical entrepreneur?
A) Confidence in their ability to succeed
B) Value of money over achievement
C) Desire for immediate feedback
D) A future orientation
Answer: B
Diff: 1
Learning Obj.: 1.2 Describe the entrepreneurial profile.
AACSB: Reflective Thinking
10) How does the churn rate of new ventures impact the economy?
A) Large companies will continue to have an economic competitive edge.
B) It leads to lower levels of new business formation.
C) Standards of living decline when businesses fail.
D) It creates a healthy response to the competitive landscape.
Answer: D
Diff: 3
Learning Obj.: 1.2 Describe the entrepreneurial profile.
AACSB: Analytical Thinking
11) Entrepreneurs who repeatedly start businesses and grow to a sustainable size before striking
out again are known as which type of entrepreneur?
A) Opportunistic
B) Persistent
C) Serial
D) Classic
Answer: C
Diff: 1
Learning Obj.: 1.2 Describe the entrepreneurial profile.
AACSB: Reflective Thinking
3
Copyright © 2026 Pearson Education, Inc.
Essentials of Entrepreneurship and
Small Business Management
Revised by Susan Schanne
Essentials of
Entrepreneurship
and Small Business
Management
Tenth Edition
Norman M. Scarborough
,Essentials of Entrepreneurship and Small Business Management, 10e (Scarborough)
Chapter 1 The Foundations of Entrepreneurship
1) Globally, how does the United States compare with other countries in terms of entrepreneurial
activity?
A) They lag behind other high-income economies at just 10.8 percent of new startups.
B) They have fewer, but more successful startups.
C) They are well above the global average of 12.9 percent.
D) They received more backing and resources from the government.
Answer: C
Diff: 1
Learning Obj.: 1.1 Define the role of the entrepreneur in business in the United States and
around the world.
AACSB: Reflective Thinking
2) According to the Kauffman Foundation, about how many entrepreneurs in the United States
start businesses of their own because they cannot find jobs elsewhere?
A) 7 percent
B) 19 percent
C) 32 percent
D) 43 percent
Answer: B
Diff: 2
Learning Obj.: 1.1 Define the role of the entrepreneur in business in the United States and
around the world.
AACSB: Reflective Thinking
3) How has the downsizing trend among large companies impacted business in the United
States?
A) The rate of technological advancement has slowed.
B) Large firms take advantage of their hierarchical structure to exploit new markets.
C) Large firms have better technology that leads to competitive advantage.
D) Small, nimble competitors are better able to exploit niche markets.
Answer: D
Diff: 2
Learning Obj.: 1.1 Define the role of the entrepreneur in business in the United States and
around the world.
AACSB: Analytical Thinking
1
Copyright © 2026 Pearson Education, Inc.
,4) Today, what matters most in the economic structure influencing the United States?
A) The growth of small businesses
B) Long-term profitability
C) Factors of production
D) Knowledge and information
Answer: D
Diff: 2
Learning Obj.: 1.1 Define the role of the entrepreneur in business in the United States and
around the world.
AACSB: Analytical Thinking
5) The gig economy makes up 58 percent of the U.S. workforce.
Answer: FALSE
Diff: 1
Learning Obj.: 1.1 Define the role of the entrepreneur in business in the United States and
around the world.
AACSB: Application of Knowledge
6) One study conducted by the Global Entrepreneurship Monitor (GEM) reports that nearly one
in five people in the United States is working to start a business.
Answer: TRUE
Diff: 2
Learning Obj.: 1.1 Define the role of the entrepreneur in business in the United States and
around the world.
AACSB: Application of Knowledge
7) According to Gallup's Builder Profile assessment, how do successful entrepreneurs manage
risk?
A) They understand that the nature of entrepreneurship is based on risk.
B) They will take risks only to increase their probability of success.
C) They are willing to take higher risks for higher rewards.
D) They systematically work to eliminate it.
Answer: D
Diff: 2
Learning Obj.: 1.2 Describe the entrepreneurial profile.
AACSB: Application of Knowledge
2
Copyright © 2026 Pearson Education, Inc.
, 8) Which of the following best defines an entrepreneur?
A) One who is willing to implement a business concept and then move on if it does not meet
immediate expectations.
B) One who understands the process of developing an idea and hires small companies to turn that
idea into a viable business concept.
C) One who knows that the concept they are about to develop will result in a profitable business.
D) One who creates a new business in the face of risk and uncertainty by assembling the
necessary resources to capitalize on identified opportunities.
Answer: D
Diff: 2
Learning Obj.: 1.2 Describe the entrepreneurial profile.
AACSB: Analytical Thinking
9) Which of following is not a characteristic of the typical entrepreneur?
A) Confidence in their ability to succeed
B) Value of money over achievement
C) Desire for immediate feedback
D) A future orientation
Answer: B
Diff: 1
Learning Obj.: 1.2 Describe the entrepreneurial profile.
AACSB: Reflective Thinking
10) How does the churn rate of new ventures impact the economy?
A) Large companies will continue to have an economic competitive edge.
B) It leads to lower levels of new business formation.
C) Standards of living decline when businesses fail.
D) It creates a healthy response to the competitive landscape.
Answer: D
Diff: 3
Learning Obj.: 1.2 Describe the entrepreneurial profile.
AACSB: Analytical Thinking
11) Entrepreneurs who repeatedly start businesses and grow to a sustainable size before striking
out again are known as which type of entrepreneur?
A) Opportunistic
B) Persistent
C) Serial
D) Classic
Answer: C
Diff: 1
Learning Obj.: 1.2 Describe the entrepreneurial profile.
AACSB: Reflective Thinking
3
Copyright © 2026 Pearson Education, Inc.
