Question: According to the U.S. Department of​ Commerce, a business is considered​ “small” if it has fewer than​ _______ employees.

Answer: 500

(The U.S. Department of Commerce has traditionally considered a business to be small if it has fewer than 500 employees.​ However, the U.S. Small Business Administration has different standards based on industry. For​ example, a manufacturing firm can be considered small if it​ has1,500 or fewer​ employees, but a wholesaling firm is small if it has between​ 100-500 employees, and other industries are classified on the basis of revenue.)

Question: A majority of small businesses are involved in which​ industry?

Answer: Services

About​ 55.8% of businesses with fewer than 20 employees are involved in the service industry.

Question: Which of the following would be considered a small​ business?

Answer: A local dress shop with three employees

(This fits the definition of being independent and having relatively little influence on its market.)

Question: Which of the following types of businesses combines and transforms resources into tangible outcomes that are sold to​ others?

Answer: Manufacturing

(Manufacturers combine and transform resources into tangible outcomes and then sell them to others. Manufacturing was once the dominant technology in the United States.)

Question: Brianna buys product in large quantities and then stores that product near the large retailers to which she sells the product throughout the year. Which type of business does Brianna​ own?

Answer: Wholesaling

(Wholesalers buy products in bulk from manufacturers or other producers and store them in quantities and locations convenient for selling them to retailers.)

Question: Which of the following is true of small​ businesses?

Answer: They are independent and have little influence in the market.

(Small businesses do not have the economies of scale to create a significant impact on the market.)

Question: The process of seeking business​ opportunities, typically under conditions of​ risk, is referred to as​ _______.

Answer: entrepreneurship

(Entrepreneurship is the capacity and willingness to​ develop, organize, and manage a business​ venture, along with the risks of doing​ so, in order to make a profit.)

Question: Which of the following would likely NOT be a characteristic of a successful​ entrepreneur?

Answer: Risk aversion

(Entrepreneurs are those who assume the risk of business​ ownership; accordingly, they must be willing to deal with uncertainty and risk.)

Question: Which of the following is required to be considered an​ entrepreneur?

Answer: You assume the risk of business ownership

(Entrepreneurs are people who assume the risk of business ownership. Some entrepreneurs have a goal of independence and financial​ security, and others want to launch a new venture that can be grown into a large business.)

Question: In contrast to stereotypes of entrepreneurs of the​ past, today’s entrepreneurs are often​ ________________.

Answer: open-minded leaders

(Today’s entrepreneur is seen as an​ open-minded leader who relies on​ networks, business​ plans, and​ consensus, and is just as likely to be female as male.)