Question 1

All businesses have the potential to be aggressive growth firms.

Accepted Answer

A) True 
 B)False

Question 2

________ are(is)  generated when increasing production lowers the average cost of each unit produced.

Accepted Answer

A)   Business scalability
B)   Economies of scale
C)   Reaching for scale
D)   Market leadership
E)   Economies of scopeF) C) and D)
G) None of the above

Question 3

According to the textbook, there are three issues about business growth that entrepreneurs should appreciate. These issues are:

Accepted Answer

A)   not all businesses have the potential to be aggressive growth firms, business success scales, and business growth is a top priority of most entrepreneurial firms
B)   business growth is a top priority of most entrepreneurial firms, a business can't grow too fast, and businesses that price their products aggressively grow the fastest
C)   a business's valuation increases with its growth, a business can grow too fast, and business growth is a top priority of most entrepreneurial firms
D)   the majority of businesses have the potential to be aggressive growth firms, a business can't grow too fast, and business success scales
E)   not all businesses have the potential to be aggressive growth firms, a business can grow too fast, and business success doesn't always scaleF) A) and E)
G) None of the above

Question 4

________ means that as the number of employees a firm need increases, it becomes increasingly difficult for it to find the right employees, place them in appropriate positions, and provide adequate supervision.

Accepted Answer

A)   Difficult hazard
B)   Adverse hazard
C)   Adverse selection
D)   Moral selection
E)   Moral hazardF) All of the above
G) C) and E)

Question 5

Market leadership occurs when a firm is one of the top ten firms in an industry or niche market in terms of sales volume.

Accepted Answer

A) True 
 B)False

Question 6

Which of the following options was not identified in the textbook as an appropriate reason for growth?

Accepted Answer

A)   need to accommodate the growth of key customers
B)   influence, power, and survivability
C)   economies of scale
D)   economies of scope
E)   maintain the appearance that the firm is successfulF) D) and E)
G) A) and D)

Question 7

According to the textbook, the toughest decisions regarding business growth are made in the ________ stage of the organizational life cycle.

Accepted Answer

A)   introduction
B)   early growth
C)   continuous growth
D)   maturity
E)   declineF) D) and E)
G) B) and E)

Question 8

Andy Dungy owns a company that makes iPod and iPhone accessories. He is trying to increase his sales, primarily because he knows that increasing production lowers the average cost of each unit produced. The reason for growth illustrated in this example is:

Accepted Answer

A)   economies of scope
B)   market leadership
C)   influence, power, and survivability
D)   need to accommodate the growth of key customers
E)   economies of scaleF) A) and E)
G) B) and C)

Question 9

Jessica Martin owns an entertainment company which has increased both its profits and revenues over an extended period of time. Jessica's firm is experiencing:

Accepted Answer

A)   resolute growth
B)   unrelenting growth
C)   sustained growth
D)   unbroken growth
E)   moderate growthF) B) and C)
G) B) and D)

Question 10

According to the textbook, the businesses that have the potential to grow the fastest over a sustained period of time are ones that:

Accepted Answer

A)   solve a significant problem or have a major impact on their customers' productivity or lives
B)   are cost leaders and are promote themselves aggressively
C)   have a major impact on their customers' lives and sell high quality products
D)   take advantage of environmental trends and are cost leaders
E)   solve a significant problem or sell high quality productsF) B) and C)
G) A) and D)

Question 11

The rate at which a firm is growing on an annual basis is referred to as its:

Accepted Answer

A)   level of growth
B)   range of growth
C)   pace of growth
D)   iterations of growth
E)   sequence of growthF) A) and B)
G) D) and E)

Question 12

________ are costs that a company incurs whether it sells something or not. ________ are the costs a company incurs as it generates sales.

Accepted Answer

A)   Preset costs, marginal costs
B)   Variable, fixed costs
C)   Set costs, marginal costs
D)   Fixed costs, variable costs
E)   Marginal costs, set costsF) A) and E)
G) B) and E)

Question 13

Terry Wells owns a growing company that makes innovative kitchen appliances. One thing that Terry has to continually work at is to keep enough cash on hand to make sure she has sufficient liquidity to meet her payroll and cover her other short-term obligations. The day-to-day challenge of firm growth this example is referring to is:

Accepted Answer

A)   quality control
B)   capital constraints
C)   price stability
D)   cash flow management
E)   personnel issuesF) B) and D)
G) A) and E)

Question 14

Business success doesn't always scale.

Accepted Answer

A) True 
 B)False

Question 15

Kendell Adams owns a software development company. When he first launched his firm, he was carefully to hire employees who had the experience he was looking for, were good matches for the positions he had available, and could be properly supervised. As Kendell's firm has grown, and his need for employees has increased, he is finding that it is increasing difficult to find employees who have the qualifications he is looking for, are good matches for the positions he has available, and fit within the supervisory framework he has developed. Kendell is dealing with an issue referred to as:

Accepted Answer

A)   adverse hazard
B)   adverse selection
C)   complicated hazard
D)   ethical hazard
E)   moral selectionF) B) and E)
G) A) and B)

Question 16

The author of the book titled "The Theory of the Growth of the Firm," which is referred to in Chapter 13, is:

Accepted Answer

A)   Gary Hammel
B)   Joseph Schumpeter
C)   Edith Penrose
D)   Michael Porter
E)   Tom PetersF) A) and E)
G) All of the above

Question 17

According to Penrose, managerial services generate new market, product, and service ideas, while entrepreneurial services administer the routine functions of the firm and facilitate the proper execution of new opportunities.

Accepted Answer

A) True 
 B)False

Question 18

According to the basic model of firm growth articulated in Chapter 13, the ability to increase managerial services to facilitate growth is not friction free but is constrained and limited. Which of the following selections is not one of the factors that constrains or limits a firm's ability to increase its managerial services?

Accepted Answer

A)   the time required to socialize new managers
B)   how motivated entrepreneurs and/or managers are to grow the firm
C)   adverse selection
D)   moral hazard
E)   benchmarkingF) A) and E)
G) C) and E)

Question 19

Economies of scale occur when:

Accepted Answer

A)   increasing production lowers the average cost of each unit produced
B)   increasing production increases the average cost of each unit produced
C)   decreasing production lowers the average cost of each unit produced
D)   decreasing production increases the average cost of each unit
E)   increasing production increases the fixed cost of doing businessF) A) and B)
G) C) and E)

Question 20

________ costs are the costs a company incurs as it makes sales.

Accepted Answer

A)   Static
B)   Irregular
C)   Balanced
D)   Variable
E)   FlexibleF) A) and B)
G) A) and C)

Exam 13: Preparing for and Evaluating the Challenges of Growth

Andy Dungy owns a company that makes iPod and iPhone accessories. He is trying to increase his sales, primarily because he knows that increasing production lowers the average cost of each unit produced. The reason for growth illustrated in this example is:

Correct Answer
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Which of the following options was not identified in the textbook as an appropriate reason for growth?

Correct Answer
verified

According to the textbook, there are three issues about business growth that entrepreneurs should appreciate. These issues are:

Correct Answer
verified

are costs that a company incurs whether it sells something or not. are the costs a company incurs as it generates sales.

Correct Answer
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________ costs are the costs a company incurs as it makes sales.

Correct Answer
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Correct Answer
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Correct Answer
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All businesses have the potential to be aggressive growth firms.

Correct Answer
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Economies of scale occur when:

Correct Answer
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According to the textbook, the businesses that have the potential to grow the fastest over a sustained period of time are ones that:

Correct Answer
verified

According to the textbook, the toughest decisions regarding business growth are made in the ________ stage of the organizational life cycle.

Correct Answer
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________ are(is) generated when increasing production lowers the average cost of each unit produced.

Correct Answer
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The rate at which a firm is growing on an annual basis is referred to as its:

Correct Answer
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________ means that as the number of employees a firm need increases, it becomes increasingly difficult for it to find the right employees, place them in appropriate positions, and provide adequate supervision.

Correct Answer
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Correct Answer
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Market leadership occurs when a firm is one of the top ten firms in an industry or niche market in terms of sales volume.

Correct Answer
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According to Penrose, managerial services generate new market, product, and service ideas, while entrepreneurial services administer the routine functions of the firm and facilitate the proper execution of new opportunities.

Correct Answer
verified

Jessica Martin owns an entertainment company which has increased both its profits and revenues over an extended period of time. Jessica's firm is experiencing:

Correct Answer
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Business success doesn't always scale.

Correct Answer
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The author of the book titled "The Theory of the Growth of the Firm," which is referred to in Chapter 13, is:

Correct Answer
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Exam 13: Preparing for and Evaluating the Challenges of Growth

Andy Dungy owns a company that makes iPod and iPhone accessories. He is trying to increase his sales, primarily because he knows that increasing production lowers the average cost of each unit produced. The reason for growth illustrated in this example is:

Correct AnswerverifiedShow Answer

Which of the following options was not identified in the textbook as an appropriate reason for growth?

Correct AnswerverifiedShow Answer

According to the textbook, there are three issues about business growth that entrepreneurs should appreciate. These issues are:

Correct AnswerverifiedShow Answer

________ are costs that a company incurs whether it sells something or not. ________ are the costs a company incurs as it generates sales.

Correct AnswerverifiedShow Answer

________ costs are the costs a company incurs as it makes sales.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

All businesses have the potential to be aggressive growth firms.

Correct AnswerverifiedShow Answer

Economies of scale occur when:

Correct AnswerverifiedShow Answer

According to the textbook, the businesses that have the potential to grow the fastest over a sustained period of time are ones that:

Correct AnswerverifiedShow Answer

According to the textbook, the toughest decisions regarding business growth are made in the ________ stage of the organizational life cycle.

Correct AnswerverifiedShow Answer

________ are(is) generated when increasing production lowers the average cost of each unit produced.

Correct AnswerverifiedShow Answer

The rate at which a firm is growing on an annual basis is referred to as its:

Correct AnswerverifiedShow Answer

________ means that as the number of employees a firm need increases, it becomes increasingly difficult for it to find the right employees, place them in appropriate positions, and provide adequate supervision.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Market leadership occurs when a firm is one of the top ten firms in an industry or niche market in terms of sales volume.

Correct AnswerverifiedShow Answer

According to Penrose, managerial services generate new market, product, and service ideas, while entrepreneurial services administer the routine functions of the firm and facilitate the proper execution of new opportunities.

Correct AnswerverifiedShow Answer

Jessica Martin owns an entertainment company which has increased both its profits and revenues over an extended period of time. Jessica's firm is experiencing:

Correct AnswerverifiedShow Answer

Business success doesn't always scale.

Correct AnswerverifiedShow Answer

The author of the book titled "The Theory of the Growth of the Firm," which is referred to in Chapter 13, is:

Correct AnswerverifiedShow Answer

Correct Answer
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are costs that a company incurs whether it sells something or not. are the costs a company incurs as it generates sales.

Correct Answer
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