Chapter 1: A Perspective on Entrepreneurship

Question 1

It is a scheme aimed at improving the living standards of the nation’s citizenry

Answer 1

Economic development

Question 2

To achieve economic development and growth, managing these elements is necessary:

Answer 2

• Human resources
• Natural resources
• Capital formation
• Technology

Question 3

However, the entrepreneur’s performance will depend on support provided by _____

Answer 3

Government

Question 4

It refers to the economic activity of a person who starts, manages, and assumes the risk of a business enterprise

Answer 4

Entrepreneurship

Question 5

Entrepreneurs and enterprises are responsible for providing:

Answer 5

• Products and services for customers and producers
• Employment
• Taxes
• Demand for products and services
• Training facilities for future entrepreneurs

Question 6

In the attempt to make profit, the entrepreneur performs the following functions:

Answer 6

1. Supply the necessary capital
2. Organize production unit by buying and combining inputs like material and labor
3. Decide on the rate of output
4. Bear the risk inherent to the venture

Question 7

Defined as the introduction of a new or improved method, procedure, custom, or device

Must provide value to buyers over those offered by competitors

Answer 7

Innovation

Question 8

Four Major Stages of Transition from New Ventures into Long Term Enterprises

Answer 8

1. Prestart-up stage
2. Start-up stage
3. Early growth stage
4. Late growth stage

Question 9

This stage happens when the entrepreneur starts to question the feasibility of an idea, product, or service.

He researches and asks questions about potential markets, production, and financing.

Answer 9

Prestart-up stage

Question 10

In this stage, the entrepreneur:

• Generates capital
• Purchases facilities and equipment
• Constructs prototype products
• Tests market

Answer 10

Start-up stage

Question 11

This stage follows after establishing feasibility. Activities will be on a small scale. Limited losses also occur.

Answer 11

Early Growth Stage

Question 12

The final stage before the new venture matures into a stable enterprise.

• Management is structured
• Long-term financing is established
• Facilities planning are undertaken

Answer 12

Late Growth stage

Question 13

Factor of Production: Land

Reward & Limiting Factors:

Answer 13

Rent; Supply and Demand

Question 14

Factor of Production: Capital

Reward & Limiting Factors:

Answer 14

Interest; Industry rates of government mandated rates

Question 15

Factor of Production: Labor

Reward & Limiting Factors:

Answer 15

Wages or salary; Supply and demand legislation

Question 16

Factor of Production: Entrepreneur

Reward & Limiting Factors:

Answer 16

Profits; Skill of entrepreneur

Question 17

Entrepreneur’s Predicament:

Answer 17

Entrepreneur must always offer newer and better innovations to maintain profitability because of market competition.

Question 18

Entrepreneurship and Business Size

Answer 18

Small businesses have the advantage of switching to another business concept when necessary; large businesses do not without risking too much losses.

Question 19

How do large businesses engage in entrepreneurship?

Answer 19

By hiring a person with entrepreneurial skills to innovate or create.