MSME and Business Entrepreneurship MCQs with Answers

Question-1. Which of these statements best describes the context for entrepreneurship?

1. Entrepreneurship takes place in small businesses.
2. Entrepreneurship takes place in large businesses.
3. Entrepreneurship takes place in a wide variety of contexts.
4. Entrepreneurship does not take place in social enterprises.

Question-2. Which one of the following actions by an entrepreneur is most likely to contribute to creative destruction?

1. Development of a new product
2. Take-over of a competitor
3. Issuing shares
4. Reducing prices

Question-3. Why are small businesses important to a country's economy?

1. They give an outlet for entrepreneurs.
2. They can provide specialist support to larger companies.
3. They can be innovators of new products.
4. All the above.

Question-4. _____ is defined as one in which the investment in fixed assets of plant and machinery does not exceed rupees one crore.

1. Limited Companies
2. None of these
3. Small Scale Industry
4. Large Scale industry

Question-5. ________ are also known as Rural industries or Traditional industries

1. Food industry
2. Cottage Industries
3. None of these
4. Agricultural industry

Question-6. A small scale serivce and business enterprise is one whose investment in fixed assets of plant and machinery excluding land and building does not exceed ______

1. Rs.25 Lakhs
2. Rs.30 Lakhs
3. Rs.10 Lakhs
4. Rs.15 Lakhs

Question-7. Any industry located in a rural area which produces any goods, renders any service with or without the use of power is known as ________

1. City Industry
2. Town Industry
3. Village Industry
4. District Industry

Question-8. Expand EOUs

1. Essential Operating units
2. Export Order Units
3. Export Oriented units
4. Essential order units

Question-9. In India, the Village and Small Industries Sector consists of both traditional and modern small industries. This sector has ___________subgroups.

1. Eleven
2. Five
3. Ten
4. Eight

Question-10. Limit of investment in small scale industry is _________

1. one crore
2. two crore
3. five crore
4. Ten crore

Question-11. Micro enterprises are those whose investment in plant and machinery does not exceed rupees___

1. 5 Lakh
2. 3 Lakh
3. 1 Lakh
4. 2 Lakh

Question-12. Small scale industries owned and managed by women entrepreneurs have share capital of not less than __________

1. 25 percent
2. 50 percent
3. 51 percent
4. 20 percent

Question-13. The small scale industry can enjoy the status of _______ unit if it exports more than 50% of its production.

1. Domestic unit
2. Export Oriented units
3. Small scale unit
4. Import oriented units

Question-14. Which of the following comes under the Modern Small Industries?

1. Coir
2. Handicrafts
3. Khadi
4. Powerlooms

Question-15. Which of the following is organised by individuals?

1. Cottage Industries
2. Railway industry
3. None of these
4. Chemical industry

Question-16. Which of the following is part of Village and Small Industries Sector?

1. Handicrafts
2. Sericulture
3. Handlooms
4. All of these

Question-17. ______________ is a form of financing especially for funding high technology, high risk and perceived high reward projects

1. Fixed capital.
2. Current capital.
3. Seed capital.
4. Venture capital.

Question-18. _____________ can be defined as a specifically evolved work plan densed to achieve a specific objective within a specific period of time

1. Idea generation.
2. Opportunity Scanning.
3. Project.
4. Strategy.

Question-19. _____________ is used to accomplish the project economically in the minimum available time with limited resources

1. Project Scheduling.
2. Network Analysis.
3. Budget Analysis.
4. Critical Planning.

Question-20. A business arrangement where one party allows another party to use a business name and sell its products or services is known as__________.

1. A cooperative.
2. A franchise.
3. An owner-manager business.
4. A limited company.

Question-21. A new venture's business plan is important because ______.

1. It helps to persuade others to commit funding to the venture.
2. Can help demonstrate the viability of the venture.
3. Provides a guide for business activities by defining objectives.
4. All the above.

Question-22. A tiny unit is defined as an industrial or business enterprise whose investment in plant and machinery is not more than ________

1. Rs. 25 Lakhs
2. Rs.30 Lakhs
3. Rs.35 Lakhs
4. Rs.50 Lakhs

Question-23. All of the following are characteristics of small businesses EXCEPT:

1. Small businesses are independently owned, operated, and financed.
2. Small businesses have fewer than 100 employees.
3. Small businesses emphasize new or innovative practices.
4. Small businesses have little impact on industry.

Question-24. All of the following are popular demographic factors about entrepreneurs that have been studied EXCEPT:

1. Self-confidence
2. Gender
3. Education
4. Family birth order

Question-25. All of the following represent countries in which the highest level of entrepreneurial activity was found EXCEPT:

1. Australia
2. Korea
3. Norway
4. Japan

Question-26. An advantage of the small firm in the innovation process?

1. Ability to carry out R&D
2. Ability to raise finance
3. Ability of the entrepreneur to carry out multiple tasks
4. Ability of the entrepreneur to act on new ideas or product development

Question-27. An individual who has no prior business ownership experience as a business founder, inheritor of a business, or a purchaser of a business is called a(n) ____________ entrepreneur.

1. Habitual
2. Novice
3. Serial
4. Portfolio

Question-28. An individual who has prior business ownership experience is called a(n) ____________ entrepreneur.

1. Novice
2. habitual
3. Serial
4. Portfolio

Question-29. An individual who initiates, creates and manages a new business can be called _____________.

1. A leader
2. A manager
3. A professional
4. An entrepreneur

Question-30. Entrepreneurs are motivated by _________.

1. money.
2. personal values.
3. pull influences.
4. All the above.

Question-31. External links may provide incentives to:

1. Raise finance
2. Introduce new working practices
3. Introduce improvements to products
4. Attend business exhibitions

Question-32. Firms located on science parks compared to those located off science parks are:

1. More innovative
2. Less innovative
3. No more or less innovative
4. More growth orientated

Question-33. Good sources of information for an entrepreneur about competitors can be Obtained from_________.

1. Websites.
2. Product information leaflets.
3. Company reports and published accounts.
4. All the above.

Question-34. Goods or services reach the market place through ________.

1. marketing channels.
2. multilevel pyramids.
3. monopolies.
4. multiplication.

Question-35. In _________, machines and equipments are arranged in the order or sequence in which they are to be used for manufacturing the product

1. Factory Layout.
2. Product Layout.
3. Process Layout.
4. Combined Layout.

Question-36. Innovation can best be defined as_______.

1. the generation of new ideas.
2. the evolution of new ideas.
3. the opposite of creativity.
4. the successful exploitation of new ideas.

Question-37. Innovative entrepreneurs face special issues in raising:

1. Development capital
2. Structured capital
3. Human capital
4. Seed capital

Question-38. Innovative entrepreneurs may have to pay high insurance premiums due to the:

1. The need to protect patents
2. Greater employee liability
3. Greater customer liability
4. Greater trading risks

Question-39. Innovative small firms are more likely in:

1. Knowledge-based sectors
2. Biotechnology
3. Automobile manufacture
4. Aerospace manufacture

Question-40. Intellectual Property laws can protect _________.

1. Trademarks.
2. Copyright.
3. Patents.
4. All the above.

Question-41. Large investment is made in fixed assets, the project will be termed as __________.

1. Capital Intensive.
2. Labour Intensive.
3. Product Intensive.
4. Market Intensive.

Question-42. Micro enterprises are those whose investment in plant and machinery does not exceed rupees___

1. 5 Lakh
2. 3 Lakh
3. 1 Lakh
4. 2 Lakh

Question-43. Networking by innovative entrepreneurs may be most encouraged by?

1. Science parks
2. Business incubators
3. Chambers of Commerce
4. Business associations

Question-44. PERT stands for __________.

1. Programme Evaluation and Research Techniques.
2. Project Evaluation and Review Techniques.
3. Programme Evaluation and Review Techniques.
4. Project Evaluation and Research Techniques.

Question-45. Positive external trends or changes that provide unique and distinct possibilities for innovating and creating value are called _____________.

1. Strengths
2. Opportunities
3. Weaknesses
4. Threats

Question-46. Primary data is________.

1. the most important data.
2. the data that is collected first.
3. new data specifically collected for a project.
4. data that is collected second.

Question-47. Schumpeter considered that innovative entrepreneurs would:

1. Thrive
2. Disappear
3. Be absorbed within large innovative firms
4. Be absorbed within non-innovative firms

Question-48. Someone legally appointed to resolve the financial difficulties of an insolvent firm is called____________.

1. an administrator.
2. a predator.
3. an auditor.
4. a turnaround consultant.

Question-49. Someone who improves an existing business can be called _________.

1. An intrapreneur.
2. A professional.
3. A co-worker.
4. A changeling.

Question-50. The creation of new firms is important because these new firms contribute to economic development through benefits that include all of the following EXCEPT:

1. Product-process innovation
2. Increased tax revenues
3. Unemployment
4. Social betterment

Question-51. The most likely problem encountered by innovative entrepreneurs in raising finance is:

1. Limited security since R&D is an intangible asset
2. The costs of the patenting system
3. The exhaustion of personal equity in R&D
4. Inability of potential external funders to understand technology

Question-52. The purpose of all good small business strategy is__________.

1. to increase turnover.
2. to increase profitability.
3. to achieve competitive advantage.
4. to achieve stated objectives.

Question-53. The term ___________ denotes bonus or financial aid which is given by a government to an industry to help it compete with other units

1. Incentive.
2. Subsidy.
3. Bounty.
4. Concession.

Question-54. The three main responsibilities involved with managing an entrepreneurial venture once its up and running include all of the following EXCEPT:

1. Managing processes
2. Managing people
3. Managing bureaucracy
4. Managing growth

Question-55. The UK government has implemented a number of policies to encourage Entrepreneurship in schools. One such initiative is _________.

1. Young Enterprise.
2. Youth venture.
3. Young Business.
4. Young Initiative.

Question-56. The use of informal networks by entrepreneurs to gather information is known as _______.

1. Secondary research.
2. Entrepreneurial networking.
3. Informal parameters.
4. Marketing

Question-57. To provide financial assistance to entrepreneurs the government has set up a number of___________.

1. financial advisors.
2. financial intermediaries.
3. Industrial estates.
4. financial institutions.

Question-58. Which could provide an individual with the motivation to start a new business venture?

1. The financial rewards.
2. A desire to be independent.
3. Risk taking
4. All the above.

Question-59. Which industrial sector tends to naturally promote small-scale businesses and Entrepreneurship, and generally has lower barriers to market entry?

1. Service.
2. Manufacturing.
3. Distribution.
4. Agriculture.

Question-60. Which of the following is a recognized disadvantage of setting up as a start-up as compared with other routes to market entry?

1. less satisfaction of the owners.
2. less help from various agencies.
3. there are more funds required.
4. there is a high failure rate.

Question-61. Which of the following is least likely to influence the timing of new business births?

1. Government policies.
2. Profitability.
3. Consumer expenditure.
4. Weather conditions.

Question-62. Which of the following is NOT on of the three areas in which the importance of entrepreneurship can be shown?

1. Innovation
2. Number of new start-ups
3. Job creation and employment
4. bureaucracy

Question-63. Which of the following is NOT recognized as a misconception about entrepreneurship?

1. Successful entrepreneurship needs only a great idea.
2. Entrepreneurship is easy.
3. Entrepreneurship is found only is small businesses.
4. Entrepreneurial ventures and small businesses are different.

Question-64. Which of the following is organised by individuals?

1. Cottage Industries
2. Railway industry
3. None of these
4. Chemical industry

Question-65. Which of the following is the reason for business failure __________.

1. Lack of market research.
2. Poor financial control.
3. Poor management.
4. All the above.

Question-66. Which of the following statements is false?

1. Market segmentation is a useful process for small businesses to undertake.
2. Selling is essentially a matching process.
3. A benefit is the value of a product feature to a customer.
4. It is a good idea for small businesses to compete solely on price.