Question 1

The disadvantages of franchising mainly affect the franchisee because the franchisor retains a great deal of control.

Accepted Answer

A) True 
 B)False

Question 2

According to a government source, more than half of this century's technological innovations came from small companies.

Accepted Answer

A) True 
 B)False

Question 3

The SBA makes a special effort to

Accepted Answer

A)  assist minorities wanting to start small businesses or expand existing ones.
B)  send SCORE program executives to high schools.
C)  hand-deliver their publications.
D)  raise money for small businesses.
E)  encourage teenage entrepreneurship.F) A) and B)
G) A) and E)

Question 4

Through her university, Gwen and her classmates work together to provide management counseling to small businesses in their community. This is called a

Accepted Answer

A)  small-business administration.
B)  small-business development center.
C)  small-business investment company.
D)  small-business institute.
E)  community improvement council.F) None of the above
G) C) and D)

Question 5

Many entrepreneurs lack the management skills required to run a business.

Accepted Answer

A) True 
 B)False

Question 6

A new business is built around the entrepreneur.

Accepted Answer

A) True 
 B)False

Question 7

Which of the following statements is not true about small businesses?

Accepted Answer

A)  Small businesses provide technical innovation.
B)  Small businesses create cyclical unemployment.
C)  Small businesses provide employment.
D)  Small businesses provide competition.
E)  Small businesses fill the needs of society and other businesses.F) None of the above
G) B) and D)

Question 8

An individual or organization granting a license to operate an individually owned business as though it were part of a chain of outlets or stores is a(n)

Accepted Answer

A)  franchise.
B)  franchisor.
C)  franchisee.
D)  venture capitalist.
E)  entrepreneur.F) A) and E)
G) D) and E)

Question 9

What organization issues management, marketing, and technical publications of interest to present and prospective small-business managers that can be obtained from the U.S. Government Printing Office?

Accepted Answer

A)  SBI
B)  SBIC
C)  SEC
D)  SBA
E)  SBDCF) C) and D)
G) C) and E)

Question 10

There are three general types of franchising arrangements. In one approach, the franchisor authorizes retailers to sell a particular brand-name item. This type of arrangement is common in all of the following areas except

Accepted Answer

A)  the soft-drink industry.
B)  truck and car sales.
C)  shoe sales.
D)  the gasoline industry.
E)  paint sales.F) D) and E)
G) B) and C)

Question 11

​In the United States, it typically takes ____ and about $600 to establish a business as a legal entity.

Accepted Answer

A)  ​less than a week
B)  ​about a month
C)  ​a month and a day
D)  ​two weeksE) None of the above
F) A) and D)

Question 12

The incidence of innovation among small-business workers is significantly higher than that among workers in large businesses.

Accepted Answer

A) True 
 B)False

Question 13

Small-business investment companies

Accepted Answer

A)  are an extension of the SBA.
B)  are individual, nonprofit organizations.
C)  are profit-making organizations.
D)  do not expect a return on their investments.
E)  make loans to small businesses.F) All of the above
G) A) and E)

Question 14

The main reason there are fewer production industries than distribution or service industries is that

Accepted Answer

A)  there are few things production industries manufacture.
B)  production industries have no market.
C)  production industries need a large initial investment.
D)  there is little chance for profit in production industries.
E)  few people want to work in production industries.F) A) and D)
G) A) and E)

Question 15

What do franchisees typically have to pay to the franchisor?

Accepted Answer

A)  One-time franchise fee
B)  Monthly royalties based on sales
C)  Nominal fee for business knowledge
D)  Approximately half of the franchise's profits each month
E)  One-time franchise fee and monthly royalties based on salesF) A) and D)
G) A) and E)

Question 16

All of the following are disadvantages to the franchisee except

Accepted Answer

A)  a loss of control.
B)  continuing royalty fees.
C)  hard work.
D)  a fee for advertising.
E)  starting a business with limited capital.F) B) and E)
G) A) and B)

Question 17

Your friend, Shonta, started a graphic design firm about a year ago. The business has done well, but it needs a lot more equipment, computers, and employees to continue expanding. Shonta does not see any problem because she thinks she can easily get all the money she will need from her local bank. What advice might you give her?

Accepted Answer

A)  She is right, the bank is likely to lend her as much as she needs because banks primarily focus on supporting small businesses.
B)  She is crazy, banks do not lend money to small businesses but only to well- known, well-established organizations.
C)  She should sell her business immediately before it fails because most small businesses fail during the first five years.
D)  She should not accept any new clients so that she can end the need to add additional equipment and employees.
E)  She should consider alternative sources of financing because banks provide only about one-fourth of the total capital to small businesses.F) D) and E)
G) C) and D)

Question 18

Price Waterhouse, a large accounting firm, would be most properly classified in the ____ industry, whereas a grocery store such as Kroger would be included in the ____ industry.

Accepted Answer

A)  distribution; production
B)  service; distribution
C)  production; service
D)  service; production
E)  distribution; serviceF) C) and D)
G) C) and E)

Question 19

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

Accepted Answer

A)  distribution business.
B)  production business.
C)  service business.
D)  retailer.
E)  manufacturer.F) A) and B)
G) A) and C)

Question 20

The SBA places special emphasis on aid to

Accepted Answer

A)  new businesses.
B)  those in production industries.
C)  minority-owned businesses.
D)  franchise outlets.
E)  those in need of guaranteed loans.F) B) and E)
G) A) and E)

Exam 5: Small Business, Entrepreneurship, and Franchises

The incidence of innovation among small-business workers is significantly higher than that among workers in large businesses.

Correct Answer
verified

Price Waterhouse, a large accounting firm, would be most properly classified in the industry, whereas a grocery store such as Kroger would be included in the industry.

Correct Answer
verified

All of the following are disadvantages to the franchisee except

Correct Answer
verified

The disadvantages of franchising mainly affect the franchisee because the franchisor retains a great deal of control.

Correct Answer
verified

Small-business investment companies

Correct Answer
verified

The main reason there are fewer production industries than distribution or service industries is that

Correct Answer
verified

Which of the following statements is not true about small businesses?

Correct Answer
verified

What organization issues management, marketing, and technical publications of interest to present and prospective small-business managers that can be obtained from the U.S. Government Printing Office?

Correct Answer
verified

The SBA places special emphasis on aid to

Correct Answer
verified

According to a government source, more than half of this century's technological innovations came from small companies.

Correct Answer
verified

What do franchisees typically have to pay to the franchisor?

Correct Answer
verified

Many entrepreneurs lack the management skills required to run a business.

Correct Answer
verified

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

Correct Answer
verified

A new business is built around the entrepreneur.

Correct Answer
verified

Correct Answer
verified

In the United States, it typically takes ____ and about $600 to establish a business as a legal entity.

Correct Answer
verified

There are three general types of franchising arrangements. In one approach, the franchisor authorizes retailers to sell a particular brand-name item. This type of arrangement is common in all of the following areas except

Correct Answer
verified

Through her university, Gwen and her classmates work together to provide management counseling to small businesses in their community. This is called a

Correct Answer
verified

An individual or organization granting a license to operate an individually owned business as though it were part of a chain of outlets or stores is a(n)

Correct Answer
verified

The SBA makes a special effort to

Correct Answer
verified

Exam 5: Small Business, Entrepreneurship, and Franchises

The incidence of innovation among small-business workers is significantly higher than that among workers in large businesses.

Correct AnswerverifiedShow Answer

Price Waterhouse, a large accounting firm, would be most properly classified in the ____ industry, whereas a grocery store such as Kroger would be included in the ____ industry.

Correct AnswerverifiedShow Answer

All of the following are disadvantages to the franchisee except

Correct AnswerverifiedShow Answer

The disadvantages of franchising mainly affect the franchisee because the franchisor retains a great deal of control.

Correct AnswerverifiedShow Answer

Small-business investment companies

Correct AnswerverifiedShow Answer

The main reason there are fewer production industries than distribution or service industries is that

Correct AnswerverifiedShow Answer

Which of the following statements is not true about small businesses?

Correct AnswerverifiedShow Answer

What organization issues management, marketing, and technical publications of interest to present and prospective small-business managers that can be obtained from the U.S. Government Printing Office?

Correct AnswerverifiedShow Answer

The SBA places special emphasis on aid to

Correct AnswerverifiedShow Answer

According to a government source, more than half of this century's technological innovations came from small companies.

Correct AnswerverifiedShow Answer

What do franchisees typically have to pay to the franchisor?

Correct AnswerverifiedShow Answer

Many entrepreneurs lack the management skills required to run a business.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

A new business is built around the entrepreneur.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

​In the United States, it typically takes ____ and about $600 to establish a business as a legal entity.

Correct AnswerverifiedShow Answer

There are three general types of franchising arrangements. In one approach, the franchisor authorizes retailers to sell a particular brand-name item. This type of arrangement is common in all of the following areas except

Correct AnswerverifiedShow Answer

Through her university, Gwen and her classmates work together to provide management counseling to small businesses in their community. This is called a

Correct AnswerverifiedShow Answer

An individual or organization granting a license to operate an individually owned business as though it were part of a chain of outlets or stores is a(n)

Correct AnswerverifiedShow Answer

The SBA makes a special effort to

Correct AnswerverifiedShow Answer

Correct Answer
verified

Price Waterhouse, a large accounting firm, would be most properly classified in the industry, whereas a grocery store such as Kroger would be included in the industry.

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

In the United States, it typically takes ____ and about $600 to establish a business as a legal entity.

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified