ENTREPRENEURSHIP AND SMALL BUSINESS

DEVELOPMENT MCQ Answer: b

1. Which of these is not a type of 3. Which of these is not a category of external

entrepreneurship? forces that affects a business?
a. Competitive forces
a. Small business entrepreneurship b. Technological forces.
b. Scalable entrepreneurship c. Economic forces
c. Large scale entrepreneurship d. Socio-economic forces
d. Intrapreneurship
Answer: b
Answer: d
4. Which among these is a money manager who
2. Which of these actions of an entrepreneur will is involved in making risk investments from
most likely result in creative destruction? equity capital with the objective of gaining
better returns?
a. Developing a new product
a. Entrepreneur
b. Taking over a competitor’s business
b. Businessperson
c. Issuing shares to individuals and
institutions c. Buyer
d. Lowering prices of your product or d. Venture capitalist
service
Answer: d
Answer: a
5. Andrew Carnegie belonged to this century:
3. According to Schumpeter, innovative a. 16th to 17th Century
entrepreneurs would:
b. 20th to 21st Century.
a. Thrive in the market
c. 17th to 18th Century
b. Not survive and disappear from the
market. d. 19th to 20th Century

c. Get absorbed within larger innovative

businesses Answer: d
d. Get absorbed within non-innovative
businesses 6. Which of these is the first activity of a new
business?
a. Departure point
Answer: c
b. Goal Orientation
1. Which of these is not a challenge for the c. Business skill development
entrepreneur? d. None of the above
a. Managing the cash flow of their
business Answer: a
b. Recruiting new employees
c. Choosing the product or service to 7. Who should be involved in preparing a firm’s
sell in the market business plan?
d. Formulating rules and regulations a. Accountant
relating to conducting b. Engineer
entrepreneurship in their country
c. Entrepreneur
Answer: d d. None of the above

2. Which of these theories involve taking a Answer: c

moderate amount of risk as a function of skill
and not chance? 8. What should be the main worry of a company’s
a. Need for achievement founder who asks for capital in exchange for
equity shares in their venture?
b. Need for affiliation
a. Valuation
c. Need for authority
b. Control
d. Need for independence
c. Capitalization
 d. Legal formalities d. Personal decisions

Answer: c Answer: b

9. The process of creating something new is 15. Ownership position of more than 50 per cent in
called: a business is known as:
a. Creative flexibility a. Minority Interest
b. Management b. Joint Venture
c. Business c. Majority Interest
d. Innovation d. None of the above

Answer: d Answer: c

10. Ownership position of less than 50 per cent in 16. What is the purpose of a feasibility study for
a business is known as: starting a new venture?
a. Majority Interest a. Exploring for potential customers
b. Joint Venture b. Estimate sales
c. Minority Interest c. To understand if there are any
d. None of the above barriers to success
d. None of the above
Answer: c
Answer: c
11. Which of these is also known as corporate
venturing? 17. An entrepreneur who is the owner of more
a. Intrapreneurship than one business is called:

b. Mergers a. Portfolio Entrepreneur

c. Entrepreneurship b. Intrapreneur

d. Acquisition c. Corporate Entrepreneur

d. None of the above
Answer: a
Answer: a
12. If an entrepreneur takes decisions on behalf of
their enterprise, it is known as ______: 18. An individual who starts , creates and
a. Routine decisions
manages a new business is called
b. Strategic decisions
c. Organisational decisions
a. leader
d. Personal decisions

Answer: c b. manager

13. Entrepreneurship Development Program is c. professional

helpful for:
a. First-generation entrepreneurs d. entrepreneur
b. Future generation entrepreneurs
c. Existing Entrepreneurs Ans. D
d. None of the above
19. 1. Innovation can best be defined
Answer: a
as_______.
14. These decisions are concerned with policy
matters and they influence the goals and
objectives of a business venture:
A. the generation of new ideas.
a. Routine decisions
B. the evolution of new ideas.
b. Strategic decisions
c. Organisational decisions
C. the opposite of creativity. C. shareholders value

D. the successful exploitation of new D. business development

ideas.
5. According to sociological approach,

2. Which of these statements best entrepreneurship

describes the context for
A. Process of sensitivity
entrepreneurship?
B. Process of role performance
A. Entrepreneurship takes place in small

businesses. C. Process of economic change

B. Entrepreneurship takes place in large D. All of these

businesses. 6. Which of the following attitudes Is not

C. Entrepreneurship takes place in a wide generally associated with successful

variety of contexts. entrepreneurship :

D. Entrepreneurship does not take place

A. Competition and co-operation
in social enterprises.
B. Desire to influence others
3. Entrepreneurship can best be
C. Innovation and product improvement
described as _________.

D. Status quo in business

A. a process that requires setting up a

business. 7. The function of entrepreneur are:

B. taking a significant risk in a business A. To imagine a business idea

context.
B. To study project feasibility
C. having a strong vision.
C. To setup enterprise
D. a process involving innovation, new
D. All the above
products or services, and value creation.
8. Which of the following sentence is not
4. Entrepreneurial development is the key
a characteristic of entrepreneurship:
to achieve all-round ---------------- through
A. Risk taking
acceleration of industrial and

entrepreneurial activities. B. Innovation

A. economic development C. Creative activity

B. increase in profits D. Managerial training

9. An entrepreneur is:
A. Born
B. Made
C. Bom and made both
D. All of these
10. Which of the following sentence is
inconsistent in the context of
entrepreneur:
A. He is owner of the business
B. He is risk taker
C. He operates production activities
D. He searches out business
opportunities
11. Maslow’s Hierarchy of needs theory is
governed by the fact that:
A. People are universally motivated by
needs
B. People are socially motivated by needs
C. People are politically motivated by
needs
D. None of the above
12. In under developed countries, local
mobile phone companies use the same
technology used
by big companies to manufacture their
products. Which of the following type of
Entrepreneurs is highlighted above:
A. Trading Entrepreneurs
B. Imitative Entrepreneurs
C. First generation Entrepreneurs
D. Innovative Entrepreneurs
13. All but which of the following is
considered to be a myth associated with
entrepreneurship?
A. Successful entrepreneurs are born not
made
B. First ventures are always successful
C. All entrepreneurs must willingly invest
significant sums of money
D. Successful entrepreneurs must have a
break-through invention
E. An entrepreneur faces extraordinary
business risks
14. Entrepreneurial culture and growth
orientation consists of all of the following
except:
A. Encouraging employees to generate
ideas
B. Focusing on opportunities.
C. The desire to grow at a slow and
controlled pace.
D. Being creative.
15. Intrapreneurship often takes the form
of
A. A semi-autonomous group (e.g. an
internal venture team), operating within
the
overarching structure of the parent C. a business plan provides an investor

organization. with something to react to.

B. A spinout venture from a university to D. a business plan is a selling document

commercial a new invention. that enables a company to present itself

to
C. A subsidiary of a large corporation

developing a new product. potential suppliers and business

partners.
D. A semi-autonomous group operating

outside the overarching structure of the 18. A new venture's business plan is

parent important because ______.

organization. A. It helps to persuade others to commit

funding to the venture.

16. A ______________ is a professional

money manager who makes risk B. Can help demonstrate the viability of

investment from a the venture.

pool of equity capital to obtain a high rate C. Provides a guide for business

of return on investments. activities by defining objectives.

A. venture capitalist D. All the above.

B. entrepreneur 19. To provide financial assistance to

entrepreneurs the government has set up

C. businessman
a number
D. buyer
of___________.
17. A business plan is important for all of
A. financial advisors.
the following reasons EXCEPT:
B. financial intermediaries.
A. a business plan forces a firm's

founders to systematically think through C. Industrial estates.

each aspect
D. financial institutions.

of their new venture.

20. _____________ can be defined as a

B. a business plan provides lenders and specifically evolved work plan densed to

investors assurance that they will earn a achieve a

decent
Specific objective within a specific period

return. of time
A. Idea generation. D. An opportunity

B. Opportunity Scanning. 24. Each of the following are ways to

identify an opportunity EXCEPT:

C. Project.

A. observing trends.
D. Strategy

B. solving a problem.
21. _____________ is used to accomplish

the project economically in the minimum C. trying out alternative uses of existing

available products.

time with limited resources D. finding gaps in the marketplace.

A. Project Scheduling. 25. Entrepreneurs can recognize

problems and find ways to solve them

B. Network Analysis.
through each of the
C. Budget Analysis.
following EXCEPT:
D. Critical Planning
A. recognizing problems in emerging
22. ______________ is a form of financing trends.
especially for funding high technology,
B. identifying a currently available
high risk
product or service and then building a
and Perceived high reward projects business

A. Fixed capital. around a better version.

B. Current capital. C. framing a problem differently than it's

been thought of before, and then

C. Seed capital.
proposing
D. Venture capital.
an appropriate solution.
23. _____ is a favorable set of
D. experiencing a problem in one's own
circumstances that creates a need for a
life, and then realizing the solution
new product, service, or
represents
business.
a business opportunity.
A. A niche
26. All of the following are characteristics
B. A venture
shared by those who excel at recognizing

C. A trend
opportunities EXCEPT:
A. brainstorming. A. A marketing plan

B. prior experience. B. Financial feasibility analysis

C. entrepreneurial alertness. C. Industry/market feasibility analysis

D. social contacts and ties with others. D. Organizational feasibility analysis

27. All of the following are suitable 30. Why is the executive summary

questions to ascertain Product/Service perhaps the most important section of

Desirability the business plan?

EXCEPT: A. This section of the plan provides in-

depth discussion of the major trends in

A. Does it make sense?
the
B. Is the product or service financially
industry in which the firm intends to
feasible?
compete.
C. Is this a good time to introduce the
B. This section of the plan summarizes
product or service in the market?
the firm's key executives.
D. Are there any fatal flaws in the product
C. If this section of the plan fails to attract
or service's basic design or concept?
an investor's interest, he or she is
28. All of the following are characteristics unlikely
of attractive industries EXCEPT:
to read the remainder of the plan.
A. the industry is young.
D. This section of the plan deals with the
B. the industry is fragmented. day-to-day operations of the company.

C. the industry is crowded. 31. Which of the following might be

termed a disadvantage faced by the small
D. the industry has high operating
business?
margins.

29. _____ is conducted to determine A. Greater flexibility

whether a proposed business has B. Greater ability to serve specialized

sufficient management markets

expertise, organizational competence, C. Extreme personal commitment of the

and resources to successfully launch its owner
business.
D. More personal service
32. The financial assistance to small 36. MSMEs are important for the Nation's

business provided by the Small Business Economy because they significantly

Administration contribute to

takes the form of: A. Industrial Production

A. direct loans B. Exports

B. guidance in locating lenders C. Employment

C. loan guarantees D. All of the above

D. assistance in filling out paperwork 37. Investment Limit of a Micro Enterprise

under manufacturing sector does not

33. Key features of a well written
exceed
business plan would include all of the

following except: _____lakhs.

A. financial plan A. 10

B. qualifications of the owner B. 20

C. an analysis of the market C. 25

D. a review of the advertising firms D. 50

analyzed
38. The manufacturing enterprises are

34. EDPs course contents contain defined in terms of investment in

___________. ___________.

A. General introduction to entrepreneurs. A. Furniture

B. Motivation training. B. Stock

C. Managerial skills. C. Plant & machinery

D. All the above D. None of these

35. MSME is defined under which act? 39. Which of the following is not

considered while selecting the region?

A. MSMED Act 2006

A. Law and order

B. MSMED Act 2001

B. Price of land
C. MSMED Act 1999

C. Availability of raw materials

D. MSMED Act 2004
D. Proximity to the product market C. whether the business is an Internet

based one or not

40. Which one of the following is the step

involved in setting up a new enterprises? D. the risk taking or re-invention of a

business vs. someone who "simply"

A. Creating a business plan
starts a
B. Making a product choice
business or buys an existing one
C. Selecting the location
44. Which of the following is not a main
D. Setting up infrastructure element of the project management

41. Which of the following is the key process?

factor for choosing the type of financing? A. Estimation.

A. Availability of funds B. Schedule.

B. Assets of the venture C. Monitor.

C. Prevailing interest rates D. Systems design.

D. All of the given options 45. SBA stands for:

42. Following is not involved in EDP A. Small business accountants

A. Identification of entrepreneurs for B. Small business administration

training
C. Small business adequacy
B. Selection of entrepreneurs for training
D. Small business advisors
C. Developing entrepreneurial capabilities
46. EDPs course contents contains
D. Arranging infrastructural facilities ___________.

43. The distinction between an A. General introduction to entrepreneurs.

"entrepreneur" and "small business
B. Motivation training.
owner" , if made, revolves

C. Managerial skills.
around:

D. All the above

A. really nothing; they are truly one and

the same 47. EDII was developed by the

B. the Small Business Administration A. Government of India

definitions
B. State Government
C. All India Financial Institutions 52. Which of the following is a function of

SIDBI?
D. Public sector banks

A. Extension of seed capital.

48. NIESBUD was established in

B. Discounting of bills.
A. 1980

C. Providing factoring services.

B. 1983

D. All of the above

C. 1986
53. A provisional SSI registration
D. 1989
certificate is valid for a period of
49. ________ is the first development __________.
bank of the country.
A. four Years.
A. ICICI.
B. three Years.
B. IDBI.
C. two Years.
C. SFC.
D. one year.
D. IFCI
54. DGTD stands for __________.
50. State Industrial corporations engage
A. Directorate General of Technical
in the development of__________.
Development.
A. industrial estates.
B. District General of Technical
B. institutional estates. Development.

C. individual investors. C. District General of Taxation Deduction.

D. agricultural entrepreneurs. D. Directorate General of Taxation

51. SIDBI was set up as a subsidiary Deduction

of_________. 55. National Alliance of Young

Entrepreneurs (NAYE) Sponsored an

A. IDBI.
Entrepreneurial
B. IFCI.
Development scheme with Bank of India
C. ICICI.
in______________.

D. SFC
A. January 1920.

B. August 1920.
C. January 1972. 60. DIC is headed by General Manager in the

rank of ___________.
D. August 1972.
A. Joint Director of industries.
56. The application for registration of a

small scale unit should be submitted to B. Assistant Director of industries.

the _______ .
C. Non-departmental officer.

A. General manager, DIC.

D. Departmental officer

B. Director, DIC.
ANWER KEYS

C. General manager. NSIC.

1.A 2.C 3.D 4.A 5.B 6.D 7.D 8.D 9.D 10.C 11.C

D. Director, NSIC. 12.B 13.D 14.C 15.A 16.A 17.B 18.C 19.D 20.C

21.A 22.D 2 3.D 24.C 25.B 26.A 27.B 28.C 29.D

57. District Industries Centres are located
30.C 31.B 32.D 33.B 34.D 35.A 36.D 37.C
____________.
38.C 39.B 40.D 41.D 42.D 43.B 44.D 45.B
A. in each district. 46.D 47.C 48.B 49.D 50.A 51.A 52.D 53.D

54.A 55.D 56.A 57.A 58.D 59.C 60.A

B. in each state.

C. only in selected districts.

D. only in selected states

58. The purpose of soft loan scheme is to

encourage units to undertake

___________.

A. modernization of plant and machinery.

B. replacement of plant and machinery.

C. renovation of plant and machinery.

D. all the above

59. EXIM bank is a __________.

A. State-level institution.

B. Regional -level institution.

C. All India institution.

D. International institution.