· Low-cost Internet technology discourages the growth of e-businesses by denying easy entry into a market. True or False? · 2. First-mover advantage alone guarantees the success of an e-business. True or False? · 3. Many traditional businesses are expanding into e-businesses where they are far less restricted by the constraints of physical space and time. True or False? · 4. Two advantages of operating an auction e-business are the low barrier to entry and that there is no need to maintain an inventory. True or False? · 5. The network effect is the ability of an e-business to continue to function successfully regardless of how large the e-business grows. True or False? 1. Which of the following may be a disadvantage to someone planning to start an e-business? a. high level of energy b. strong belief in the e-business idea c. inability to work extended hours most days d. support of family members and friends 2. The network effect is the: a. advantage of being the first to market. b. increased value to each participant as the number of participants increases. c. sending of unsolicited messages or advertisements. d. ability of an e-business idea to function well regardless of growth. 67 68 3. Which of the following factors is not important when evaluating an e-business idea? a. The idea provides a new, unique product. b. The idea exploits the network effect. c. The idea has a first-mover advantage. d. The idea is sure to make you famous. 4. Which of the following is not a useful trait for an entrepreneur? a. determination to succeed b. great organizational skills c. hesitancy to take risks d. ability to act quickly and decisively 5. Which of the following innovative marketing ideas secured early success for Hotmail? a. virtual marketing b. spam c. viral marketing d. scalable marketing True/False Questions · 1. A startup company's business plan is used only to solicit funding from investors. True or False? · 2. It is not necessary to number multiple copies of a business plan. True or False? · 3. An Executive Summary page is the least important part of a business plan. True or False? · 4. A “C” corporation is a taxable entity separate from its owners and managers. True or False? · 5. Information about key strategic partnerships should be included in a business plan. True or False? Multiple Choice Questions · 1. A business plan's executive summary: o a. allows plan readers to locate specific plan contents. o b. provides a miniature version of the complete plan. o c. provides details about products or services. o d. is a “to do” list for promoting products and services offered. · 2. A sole proprietorship: a. consists of multiple co-owners. b. is not a separate taxable entity. c. has both a general partner and several limited partners. d. provides an owner personal protection from legal claims against the business. 105 106 3. An issues analysis identifies: a. outside threats and opportuni.