True/False Questions

Chapter 5 Creativity, the Business Idea, and Opportunity Analysis

True/False Questions

1. Members of the distribution channel are usually not good sources of ideas for new products.

Answer: False Page: 140 Difficulty: Medium

2. The files of the U.S. Patent Office are kept confidential and entrepreneurs cannot study their contents.


3. The largest source of new ideas is the U.S. Patent Office.

Answer: False Page: 141 Difficulty: Easy

4. Focus groups consist of 15 to 25 participants who are asked specific objective functions.

Answer: False Page: 142 Difficulty: Hard

5. The focus group is an excellent method for initially screening ideas and concepts.

Answer: True Page: 142 Difficulty: Medium

6. The drawback with problem inventory analysis is that it cannot be used to test a new product idea.


7. Unlike the focus group, problem inventory analysis focuses on specific problems in a general product category.

Answer: True Page: 143 Difficulty: Hard

8. Creativity tends to increase with age.


9. Brainstorming is an unstructured process used for generating possible ideas about a problem within a limited time frame through the spontaneous contributions of participants.

Answer: True Page: 144 Difficulty: Easy

Hisrich, Entrepreneurship, Seventh Edition 35


10. In reverse brainstorming, the focus is on the positive, all the things that are right about an idea.


11. Brainwriting is silent, written generation of ideas by a group of people.


12. The Gordon method, in contrast with the other methods, begins with group members not knowing the exact nature of the problem.


13. Forced relationships is a method of forcing confrontations in focus groups.


14. Using the big-dream approach, a new idea is developed through a list of related issues or suggestions.


15. The big-dream approach requires the entrepreneur to dream about the problem and its solution, thinking big.


16. Creative synthesis is closely connected to the technique of parameter analysis.

Answer: True Page: 147-148 Difficulty: Hard

17. The entrepreneur's ability to recognize a business opportunity is a result of his or her knowledge and experience.


18. When evaluating new product development, the criteria should be inclusive and quantitative.


36 Hisrich, Entrepreneurship, Seventh Edition


19. One evaluation method successfully used in the concept stage is the systematic market evaluation checklist.


20. In the concept stage of product planning, the refined product idea is tested to determine customer acceptance.


21. Only the test marketing phase of product planning provides actual sales results to judge the product's customer appeal.


22. In the product development stage, consumer reaction to the physical product/service is determined.


23. The entrepreneur should always design and build his own webpage to maintain strategic control.


24. An online company's back-end operations involve integration of customer orders with distribution channels.

Answer: True Page: 160-161 Difficulty: Medium

25. Every website should have search capabilities.


26. E-Commerce online sales and long-distance deliveries for fresh fruits and vegetables for individual consumers is a fast-growing segment.


27. Using electronic databases to track customer information violates federal laws regarding individual privacy.




Multiple Choice Questions

28. Which of the following statements is true?

A) Customers form the largest source of new ideas for entrepreneurs.

B) While members of the distribution channel may be willing to provide new ideas for entrepreneurs, they may not help market them.

C) The Federal Government is not a source of new ideas since the patent information they collect is confidential.

D) Establishing a formal method for monitoring and evaluating competitive products and services on the market.

Answer: D Page: 140 Difficulty: Easy

29. Patents filed with the U.S. Patent Office:

A) frequently suggest other new products.

B) are the property of the U.S. Government.

C) are not disclosed to the public.

D) are only accessible to public limited companies.

Answer: A Page: 140 Difficulty: Medium

30. The Occupational Safety and Health Act (OSHA) mandated that first-aid kits be available in business establishments employing more than three people. A newly formed company was successful in developing first-aid kits that allowed companies to comply with the standards of the act. This is an example of:

A) distribution channels as an excellent source for new ideas.

B) existing products and services as a source for new ideas.

C) potential consumers as a source for new ideas.

D) government regulations as a source for new product ideas.

Answer: D Page: 140 Difficulty: Medium

31. The largest source of new product ideas is:

A) the U.S. Patent Office.

B) the entrepreneur's research and development.

C) customers

D) the federal government.

Answer: B Page: 141 Difficulty: Medium



32. Focus groups use which of the following methods?

A) A moderator leads the group in an open, in-depth discussion.

B) A moderator asks each individual in the group questions, interview style.

C) Each participant fills out a questionnaire, followed by individual exit interviews.

D) Each participant obtains new ideas and solutions by focusing on problems.

Answer: A Page: 142 Difficulty: Hard

33. Brainstorming groups should:

A) contain an expert in the field to be discussed.

B) be serious and work-oriented.

C) try to generate as many ideas as possible.

D) encourage criticism of ideas from other participants in the group.

Answer: C Page: 142 Difficulty: Medium

34. _____ is not desirable when brainstorming is in process.

A) "Freewheeling"

B) Criticism

C) Generating a large quantity of ideas

D) Idea combination and improvement


35. In this method, instead of generating new ideas themselves, consumers are provided with a list of problems in a general product category. What method is the author referring to here?

A) Reverse brainstorming

B) Problem inventory analysis

C) Brainstorming

D) Focus groups


36. Creativity declines with

A) training and tradition.

B) education and work experience.

C) age, education and lack of use.

D) mental health and work experience.




37. Probably the most well known and widely used technique for creative problem solving is:

A) focus groups.

B) brainstorming.

C) forced relationships.

D) scientific method.


38. Reverse brainstorming is much like brainstorming except that:

A) criticism is not allowed.

B) the technique is based on finding solutions.

C) the group need not be careful to maintain good morale.

D) the process usually involves identification of everything wrong with an idea.


39. Using ___________ participants silently write their ideas on special forms that circulate within the group.

A) brainstorming

B) reverse brainstorming

C) brainwriting

D) checklist method

Answer: C Page: 145 Difficulty: Hard

40. Which of the following problem-solving techniques begins with group members not knowing the exact nature of the problem?

A) The Gordon method

B) Matrix charting

C) Parameter analysis

D) Free association

Answer: A Page: 145 Difficulty: Hard

41. In the ________ method a new idea is developed through a list of related issues or suggestions.

A) Gordon

B) checklist

C) collective notebook

D) matrix charting

Answer: B Page: 145 Difficulty: Hard



42. In the ________ method, a word is written down, then another, creating a chain of ideas.

A) reverse brainstorming

B) matrix charting

C) heuristic

D) free association


43. Which of the following creative methods involves having participants write down their ideas several times a day?

A) Collective notebook method

B) Parameter analysis

C) Brainstorming

D) Forced relationship

Answer: A Page: 147 Difficulty: Medium

44. This problem-solving method involves developing new ideas by thinking without constraints.

A) Value analysis

B) Attribute listing

C) Brainwriting

D) Big-dream approach


45. Creative synthesis is an important aspect of the _________ method of creative problem solving.

A) brainwriting

B) forced association

C) attribute listing

D) parameter analysis

Answer: D Page: 147 Difficulty: Hard

46. In which stage of the product planning and development process would it be appropriate to give product samples to a panel of potential customers?

A) Idea stage

B) Concept stage

C) Product development stage

D) Commercialization stage

Answer: C Page: 158 Difficulty: Hard



47. The stage in the product planning and development process in which actual sales results are available is the:

A) idea stage.

B) concept stage.

C) product development stage.

D) test marketing stage.

Answer: D Page: 159 Difficulty: Easy

48. Orders and sensitive information should be transferred:

A) through credit card companies.

B) by banner ads.

C) over secure servers.

D) through open telephone lines.



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