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Exam 5: Small Business, Entrepreneurship, and Franchises

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Question 101

True/False

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A new business is built around the entrepreneur.

A) True
B) False

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Question 102

Multiple Choice

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The fact that insulin and power steering both originated with individual inventors and small companies is testimony to the power of small businesses as providers of

A) employment.
B) competition.
C) technical innovation.
D) capital.
E) quality products.

F) C) and D)
G) C) and E)

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Question 103

Multiple Choice

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Mary's cleaning business has several customers but is not dominant in its field. This is an example of a(n) ____ business.

One reason small businesses fail is that their research and development investments are less productive than those of the largest firms.

Which of the following is not a franchise establishment?

Entrepreneurial spirit is the desire to create a new business.

Which statement best characterizes the relationship between franchisor and franchisee in recent years?

Dana owns and operates a catering business. This is an example of a

Small businesses are prone to failure.

Mc-King Chicken Brian decided to open a local franchise of the well-known Mc-King Chicken, a fast-food restaurant. Before he took the initiative to open the franchise, he tried to weigh all the advantages and disadvantages. He decided, based on his research and understanding, that it would be beneficial to open a local fast-food restaurant. Mc-King has become quite successful domestically, and now it is exploring the possibility of opening franchises internationally. The company hired an international agency to help it learn what and what not to do. After the agency met with the managers of Mc-King a few times, the Mc-King management decided it would go ahead with its decision to expand internationally. -Refer to Mc-King Chicken. When Brian opens the Mc-King Chicken restaurant in his town, he would be known as the

An investor who is considering investing in Moriah's Burger Bar would not likely want to see her business plan.

Because of small-business competition, large companies must become more efficient and responsive to consumers' needs.

Many small firms seek to establish a particular niche in the market, realizing that they cannot afford to operate on a larger scale without exposing themselves to considerable risk of retaliation from larger companies. When a number of small businesses are operating in this manner, they are forcing the larger businesses to recognize and account for their influence on the market. In this way, small businesses are primarily

Small businesses are typically managed by people who started and own them.

Franchising is a win-win combination; both franchisees and franchisors are guaranteed success.

Beau works for a small pest-control company that has a total of five employees. From his point of view, the primary disadvantage of a small business is the

It is rare that managers of small businesses lack the management skills necessary to run their businesses.

Mustaffah always knew he wanted to start his own business. He was very passionate and wanted to create something new. Mustaffah's primary motivation for starting his own business is

What is a common mistake that small-business owners make when their businesses begin growing?

According to the Census Bureau and Federal Reserve surveys, about 50 percent of all new businesses begin with less than ____ in total capital.