Chapter 3 Warm-Up 1According to the US Department of? Commerce, a business is considered? “small” if

Chapter 3 Warm-Up

1According to the US Department of? Commerce, a business is considered? “small” if it has fewer than? _______ employees

A

?1,500

B

500

C

100

D

?1,000

E

250

2A majority of small businesses are involved in which? industry?

A

Services

B

Transportation

C

Wholesaling

D

Retailing

E

Construction

3The process of seeking business? opportunities, typically under conditions of? risk, is referred to as? _______

A

venture speculation

B

corporate governance

C

entrepreneurship

D

franchising

E

divestiture

4Which of the following would likely NOT be a characteristic of a successful? entrepreneur?

A

Resourcefulness

B

Risk aversion

C

Desire for independence

D

Strong customer relations skills

E

Ambition

5A form of competitive advantage that a company achieves by being the first to enter a specific market or industry is known as? _______ advantage

A

fast follower

B

pacesetter

C

?first-mover

D

innovator

E

product pioneer

6Under a franchise? agreement, the? _______ grants the right to conduct business using its business? model; the? _______ owns and operates the local business

A

?franchisee; franchiser

B

?franchiser; franchisee

C

?licensee; licensor

D

?grantee; grantor

E

?entrepreneur; investor

7After working for a large firm for several? years, Tyler started his own landscaping design business? However, he soon ran out of money and was forced to close the business because he? couldn’t pay the expenses of the firm along with his personal expenses Based on this? information, what is the likely reason for? Tyler’s business? failure?

A

Neglect

B

Insufficient capital

C

Insufficient demand for services being provided

D

Inexperience

E

Weak control systems

8Cosmetics pioneer Estee Lauder said of her success in the cosmetics? industry, “I never dreamed about success I worked for? it” Which basic factor of small business success does this BEST? describe?

A

Managerial experience

B

Hard? work, drive, and dedication

C

Luck

D

Managerial competence

E

Market demand for? products/services provided

9A? _______ is a business that is owned and usually operated by one person

A

limited partnership

B

cooperative

C

publicly held corporation

D

sole proprietorship

E

general partnership

10Lee is a sole proprietor and owns a restaurant When the economy? falters, he is forced to close his restaurant and owes creditors nearly? $24,000 The creditors can go after not only? Lee’s business assets but also his personal property such as his? house, car, and personal bank account This demonstrates the concept of? ________

A

limited liability

B

a tender offer

C

double taxation

D

divestiture

E

unlimited liability

11Which of the following is a strategy in which a firm sells one or more of its business? units?

A

Joint venture

B

Franchise

C

Acquisition

D

Divestiture

E

Strategic alliance

12Who are the owners of a? corporation?

A

Corporate officers

B

Employees

C

General partners

D

Stockholders

E

Board of directors

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