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Exam 6: Entrepreneurship and Starting a Small Business

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Question 61

Multiple Choice

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As a former classmate of Pepe's at the nearby university, you remind him what you both learned in your small business management class several years ago. What would you remind him?

A) Restaurants are easy to start up, but difficult to keep going.
B) Restaurants are probably the most difficult type of business to start up, due to the labor-intensive aspects of the business.
C) Experts believe that restaurants have a high profit potential, due the fact that there is not much direct competition.
D) Restaurants are easy to start up and have great profit potential.

E) All of the above
F) B) and C)

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Question 62

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State and local governments often act as venture capitalists.

A) True
B) False

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Question 63

Multiple Choice

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Dr. Pearl White just graduated from dental school. She is hoping to acquire the necessary funding to start her own dental practice. One advantage of this type of business is

The most common small business failures occur in businesses that are the easiest to start.

Enterprise zones offer lower tax rates and government assistance to attract private business investment.

Small businesses can provide more personalized service than a large corporation to overseas customers.

Tessa has just graduated with a business degree. Her job hunt should only focus on large corporations.

Most entrepreneurs are more interested in personal achievement than in power.

Your brother is a dentist and has opened a new practice in your hometown. As a business student you know that this type of business experiences low failure rates.

The easiest businesses to start are those that offer the greatest profit potential.

Most business opportunities offer entrepreneurs high levels of security and profits.

Angel investors are the government agencies that invest money in new companies before they go public.

The Small Business Administration sponsors volunteers from industry, trade associations, and education who offer advice to small business owners. These volunteers are called:

Questions about how much authority to delegate and to whom, are easier issues for family-run businesses since they can't fire family.

Management includes attention toward financing the business, hiring employees, marketing, and record keeping.

Compared to small businesses, large firms have a greater ability to provide personalized customer service.

Exporting offers small businesses opportunities to reduce their dependence on domestic sales and extend product lives.

A(n) ________ is a group of experienced professionals from different areas of business who join together to develop, make, and market a new product.

According to the Small Business Administration, poor management is the cause of the majority of small business failures.

Entrepreneurs are motivated by the desire to earn a profit.