Entrepreneurship in Digital Age

Sample questions

Showing 20 of 70 questions from this chapter. The full bank is in the chapter test below.

1. 1

   What is the correct order of the five steps of Design Thinking?

   • A.Empathize, Ideate, Define, Prototype, Test
   • B.Define, Empathize, Ideate, Test, Prototype
   • C.✓ Empathize, Define, Ideate, Prototype, Test (correct answer)
   • D.Ideate, Empathize, Define, Test, Prototype

   Why: Design Thinking moves from understanding people to stating the problem, generating ideas, building a quick model and finally testing it: Empathize, Define, Ideate, Prototype, Test. Ideate comes after the problem has been defined, not before it.
2. 2

   In Design Thinking, what does the Empathize step involve?

   • A.✓ Understanding another person's feelings, needs and challenges (correct answer)
   • B.Writing a formal problem statement for the team
   • C.Building a quick model of the proposed product
   • D.Calculating the cost of producing the final product

   Why: Empathize means putting yourself in the user's shoes to understand their feelings, needs and challenges. Writing the problem statement is the next step, Define, and building a model belongs to Prototype.
3. 3

   After information has been gathered, what is the job of the Define step in Design Thinking?

   • A.Brainstorm as many solutions as possible
   • B.Build a quick, low-cost model of the idea
   • C.Collect feedback from people who tried the idea
   • D.✓ State the problem clearly so the team knows exactly what to solve (correct answer)

   Why: Define turns the research into a clear problem statement, such as students needing a lightweight, durable and spacious bag. Brainstorming belongs to Ideate, and collecting feedback belongs to Test.
4. 4

   What are team members expected to do during the Ideate step of Design Thinking?

   • A.Test the prototype with real users
   • B.✓ Generate many possible solutions without judging them yet (correct answer)
   • C.Choose the cheapest material available for the product
   • D.Interview customers about their daily routines

   Why: Ideate is the brainstorming step, where all possible solutions are put forward freely and criticism is postponed. Interviewing users happens earlier, in Empathize, and testing happens last.
5. 5

   In Design Thinking, what is a prototype?

   • A.The final product, ready for mass production
   • B.A written report of the market research findings
   • C.✓ A simple version of an idea that can be built quickly to show what it might look like (correct answer)
   • D.A list of competitors' strengths and weaknesses

   Why: A prototype is a rough, quickly built model - cardboard, fabric or paper can be enough - that lets people see and react to the idea before the real product is made.
6. 6

   Why is the Test step important in Design Thinking?

   • A.It guarantees that the product will make a profit
   • B.It removes the need for any market research
   • C.It confirms that the prototype needs no further changes
   • D.✓ It collects user feedback so the design can be improved until it solves the problem (correct answer)

   Why: Testing puts the prototype in front of real users and uses their comments to improve it, and the cycle repeats until the product genuinely solves the problem. A first prototype is not expected to be perfect.
7. 7

   What is the primary goal of entrepreneurship?

   • A.✓ To solve problems and create value (correct answer)
   • B.To create new technologies
   • C.To manage finances
   • D.To compete with large corporations

   Why: Entrepreneurship is about spotting a problem and building something that solves it, which creates value for customers and for the economy. Creating technology, managing money and competing with big firms may be part of the work, but they are means rather than the goal.
8. 8

   Which of the following is a principle of Design Thinking?

   • A.Focusing mainly on short-term profit
   • B.✓ Putting the user at the centre of the design process (correct answer)
   • C.Reducing the number of employees
   • D.Copying the market leader's product

   Why: Design Thinking is a human-centered approach: it begins with real users' needs rather than with profit targets, staff cuts or copying what rivals already sell.
9. 9

   Which technique is commonly used in Design Thinking to produce many possible solutions?

   • A.SWOT analysis
   • B.Lean manufacturing
   • C.Data mining
   • D.✓ Brainstorming (correct answer)

   Why: Brainstorming is the idea-generation technique at the heart of the Ideate step. SWOT analysis is a strategic planning tool for judging a business's position, not a way of generating design ideas.
10. 10

    A small grocery store keeps running out of its most popular items. Which of these is a business solution to the problem?

    • A.Lowering the prices of all products
    • B.Hiring extra sales staff for weekends
    • C.✓ Ordering more frequently and using software to track inventory (correct answer)
    • D.Advertising the store on social media

    Why: The problem is stock control, so the solution is better ordering and inventory tracking, which keeps shelves full and customers satisfied. Lower prices, extra staff or advertising do not address why items run out.
11. 11

    A company wants its new online food-ordering app to be easy for people to use. How does Design Thinking help most here?

    • A.✓ By focusing on the user's experience and testing ideas with users before the final build (correct answer)
    • B.By copying the features of the most popular existing app
    • C.By reducing the development budget to the minimum
    • D.By launching first and fixing problems only after users complain

    Why: Design Thinking works outwards from the user's experience, so the team tests early ideas with real users and improves them before committing to a final product. Copying a rival or waiting for complaints skips that user-centred work.
12. 12

    What is a business plan?

    • A.A record of a company's past profits and losses
    • B.✓ A document that describes a business idea, how it will succeed and the steps needed to reach its goals (correct answer)
    • C.A legal licence that a business must obtain before opening
    • D.A list of all the employees a business intends to hire

    Why: A business plan is a forward-looking document, often described as a map for starting and running the business: it sets out the idea, the plan for success and the steps to get there.
13. 13

    What is the purpose of the Executive Summary in a business plan?

    • A.To list every expense the business expects to pay
    • B.To name all the competitors in the market
    • C.✓ To give a brief overview of the business idea, its goals and how they will be achieved (correct answer)
    • D.To record the names of investors who have already paid

    Why: The Executive Summary captures the most important points of the whole plan in a short overview. Detailed expenses belong in the Financial Plan and competitor details in the Market Analysis.
14. 14

    Which section of a business plan describes the products or services offered, the target customers and what makes the business unique?

    • A.Executive Summary
    • B.Market Analysis
    • C.Financial Plan
    • D.✓ Business Description (correct answer)

    Why: The Business Description explains what the business is about - what it sells, who it sells to and what sets it apart. Market Analysis instead examines customers' needs and competitors in the wider market.
15. 15

    What should the Market Analysis section of a business plan show?

    • A.The exact profit the business will make in its first year
    • B.✓ That the founder understands customers' needs and knows who the competitors are (correct answer)
    • C.The personal background of the founder
    • D.The design of the company logo

    Why: Market Analysis demonstrates knowledge of the market: who the potential customers are, what they need and which competitors already serve them. Profit forecasts belong to the Financial Plan.
16. 16

    The first step in creating a business plan involves:

    • A.✓ Defining the business idea (correct answer)
    • B.Financial forecasting
    • C.Market analysis
    • D.Setting sales targets

    Why: You cannot analyse a market or forecast finances until you have decided what the business is, so defining the business idea comes first. Financial forecasting, market analysis and sales targets all build on that starting point.
17. 17

    A Financial Plan in a business plan normally includes which of the following?

    • A.Only the salaries of the founders
    • B.Only the price list of the products
    • C.The company's mission statement
    • D.✓ The budget, the funding needed and the expected revenue (correct answer)

    Why: The Financial Plan sets out financial goals and how they will be reached, so it covers the budget, how much funding is required and what revenue is expected in return.
18. 18

    Software such as PlanGuru and Enloop is used in business planning to:

    • A.Edit photographs for company advertisements
    • B.Manage a company's social media accounts
    • C.✓ Provide structured templates and generate financial projections for a business plan (correct answer)
    • D.Track the daily attendance of staff

    Why: Business plan software offers templates for sections such as the business overview and market analysis, plus financial calculators that turn figures like inventory and marketing costs into projections such as estimated sales and cash flow.
19. 19

    Two partners in different cities are writing one business plan together. Which kind of tool lets them work on the same document at the same time?

    • A.✓ A cloud-based collaborative platform such as Google Drive or Dropbox Paper (correct answer)
    • B.A single printed notebook kept at the shop
    • C.A spreadsheet emailed back and forth once a week
    • D.Letters sent by post between the two partners

    Why: Collaborative platforms let several people edit the same document at once and see revisions in real time, which is exactly what a shared business plan needs. Posting or emailing copies creates delays and conflicting versions.
20. 20

    Why does a business collect market insights?

    • A.To calculate the taxes it must pay
    • B.✓ To understand customer needs and market trends (correct answer)
    • C.To decide the salary of the manager
    • D.To keep records of its inventory

    Why: Market insights are gathered and analysed to learn about target customers, competitors and the overall market environment, which supports better decisions about products, prices and marketing.