Entrepreneurship and Economic Development Quiz

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Questions and Answers

How do entrepreneurs contribute to economic development?

They focus exclusively on enhancing foreign investments.

They create government legislation.

They increase taxation on individuals only.

They improve per capita income and generate employment. (correct)

What scoring value represents that a characteristic is rarely displayed?

1 (correct)

What percentage increase in per capita wealth generation did entrepreneurship bring about in the 1700s?

20 Percent (correct)

10 Percent

50 Percent

25 Percent

Which of the following characteristics suggests a willingness to take risks?

I do not hesitate to undertake risks. Signup and view all the answers

What role do entrepreneurs play in employment opportunities?

They generate jobs through new enterprises. Signup and view all the answers

Why is setting both short and long-term goals important for an entrepreneur?

It provides direction and focus. Signup and view all the answers

Which statement best describes an entrepreneurial organization?

It fosters an internal environment conducive to innovation. Signup and view all the answers

What is one of the major issues addressed by entrepreneurs in developing economies?

Providing jobs for educated youth Signup and view all the answers

What is a characteristic of someone who regularly evaluates their job performance?

They look for areas of improvement. Signup and view all the answers

How do entrepreneurs inspire others to pursue entrepreneurship?

Through team creation within their ventures. Signup and view all the answers

Which characteristic indicates that an entrepreneur values feedback from others?

I strive for improvement despite positive feedback. Signup and view all the answers

What is one way an entrepreneur can prevent future risks?

By proactively identifying potential risks. Signup and view all the answers

What was the change in per capita wealth generation in the 1900s attributed to entrepreneurs?

740 percent increase Signup and view all the answers

What does the characteristic of teamwork indicate about an entrepreneur?

They value collaboration for complex tasks. Signup and view all the answers

Which of the following is NOT a benefit of entrepreneurial development?

Stagnation in economic growth Signup and view all the answers

What is the significance of assessing time and capacity before taking on a job?

It ensures high-quality production. Signup and view all the answers

What does innovation primarily refer to?

Any new way of doing something that creates value Signup and view all the answers

What must be actively sought out in order to exploit market potential?

Market opportunity Signup and view all the answers

Which group does not typically support entrepreneurs in driving their innovations to market?

Competitors Signup and view all the answers

What is primarily prioritized over innovation according to the provided content?

Market opportunity Signup and view all the answers

What is an entrepreneur's expertise related to?

Allocating scarce resources with limited information Signup and view all the answers

Which of the following is not mentioned as a stakeholder benefiting from an entrepreneur’s venture?

Rival businesses Signup and view all the answers

What does the wealth of an entrepreneur encompass?

Knowledge, assets, and money Signup and view all the answers

What differentiates an entrepreneur from a regular manager?

The effectiveness and impact they have as managers Signup and view all the answers

What is the first step in the opportunity identification and evaluation process?

Getting the idea/scanning the environment Signup and view all the answers

Which of the following correctly defines an 'opportunity'?

A set of circumstances for doing something Signup and view all the answers

Why is opportunity identification critical in the entrepreneurial process?

It prevents the process from leading to failure Signup and view all the answers

Which step follows the 'developing the opportunity' stage in the process?

Evaluating the opportunity Signup and view all the answers

What is one of the major reasons cited for business failures?

Inadequate opportunity identification Signup and view all the answers

Which term is synonymous with 'idea' as used in the context of this chapter?

Intention Signup and view all the answers

How many main steps are there in the opportunity identification and evaluation stage?

Five Signup and view all the answers

Which of the following is not identified as a component of the entrepreneurial process?

Focus on financial outcomes Signup and view all the answers

What is considered the primary characteristic of the external environment for a business?

It is external to the business and hard to influence. Signup and view all the answers

Which component is NOT part of the economic environment?

Labor union regulations Signup and view all the answers

What should entrepreneurs do to stay informed about legal changes relevant to their business?

Consult government agencies about legal matters. Signup and view all the answers

What is the best way for an entrepreneur to influence legal laws positively?

By strictly obeying laws and advocating for improvements. Signup and view all the answers

What does the political environment entail for businesses?

It plays a critical role in shaping business operations. Signup and view all the answers

Which of the following best describes the role of economic conditions in business success?

They have a close relationship with business success. Signup and view all the answers

What is an effective strategy for an entrepreneur facing new legal changes?

Read relevant literature on business laws. Signup and view all the answers

Why is understanding laws crucial for business entrepreneurs?

To prevent unintentional legal breaches and penalties. Signup and view all the answers

What should be evaluated regarding the sources of required capital?

How much is secured and where the rest will come from Signup and view all the answers

Which of these represents a risk associated with a product or service?

Inability to grow with demand or cope with shrinking sales Signup and view all the answers

What factor is crucial in assessing the entrepreneurial team?

The team's experience in the relevant industry Signup and view all the answers

How should potential funders be assessed?

By creating a comprehensive list of potential funders Signup and view all the answers

What should be considered when evaluating team management?

The willingness of everyone on the team to work full time Signup and view all the answers

Which question helps to evaluate the ownership aspect of the team?

Have critical decisions about ownership and equity splits been resolved? Signup and view all the answers

Why is team motivation important in a startup?

It affects the relationship with the entrepreneur and decision-making Signup and view all the answers

Which aspect is NOT a question for evaluating the entrepreneurial team?

Have the environmental impacts been assessed? Signup and view all the answers

Study Notes

Entrepreneurial Ecosystem

A system that supports entrepreneurship is composed of local & global markets, government policy, regulatory framework, infrastructure, human capital, workforce, education & training, universities as catalysts, mentors, advisors, support systems, funding & finance, and culture.

Ministry of Science and Higher Education (MoSHE)

Prepared by Bantie Workie (PhD), Mulugeta Chane (MBA), Mustefa Mohammed (MBA), and Teshale Birhanu (PhD).
Addis Ababa, Ethiopia
September 2019

Contents (Chapter 1: The Nature of Entrepreneurship)

Introduction: discusses entrepreneurship in everyday conversation and technical context of management and economics.
Historical Origin of Entrepreneurship: describes the word entrepreneur in ancient times, 17th century, 18th century, and 19th/20th century.
Definitions of Entrepreneurship and Entrepreneur: defines entrepreneurship as the process of creating something different and better with personal satisfaction. Also, defines entrepreneurship in terms of the actions of the entrepreneur in particular projects.
Roles of Entrepreneurs in Economic Development: entrepreneurs are important for industrial development, generating jobs, increased income and revenue.
Entrepreneurial Competence and Environment
Entrepreneurial Mindset
Qualities of an Entrepreneur: important qualities include opportunity seeking, persevering, risk taking, demanding for efficiency and quality, information-seeking and goal-setting, persuasion and networking, and building self-confidence.

Contents (Chapter 2: Business Planning)

Introduction: addresses opportunity identification and evaluation, business idea development, and business plan preparation.
Opportunity Identification and Evaluation: outlines steps in identifying and evaluating opportunities in a market; scanning the environment, identifying, developing, evaluating, and evaluating the team.
Opportunity Identification: discusses how to discover and identify opportunities.
Opportunity Development: process of adapting a recognized opportunity to meet actual market needs.
Opportunity Evaluation: critical steps in evaluating a potential business idea, including risk assessment, return potential, and competitiveness.
Business factors and questions for opportunity evaluation(tabulated): Business factor (product or service, market opportunity, costing and pricing, profitability, and capital requirements) and corresponding evaluation questions.
Assessment of Entrepreneurial Team (tabulated)
Business Idea Development: details steps in finding a business idea.
Business Idea Identification: provides cases on business idea situations.
Methods for Generating Business Ideas: Includes brainstorming, free association, and problem-solving techniques.
Business Idea Screening: describes screening steps for choosing a potential business venture.
Concept of Business Plan & Business Planning Processes: discusses business plans as a roadmap for a business, covering its components like cover sheet, executive summary, business description etc.

Contents (Chapter 3: Business Formation)

Introduction: discussing business development, legal forms, and the importance of Micro, Small Enterprises (MSEs) in Ethiopia and globally
Definition of Small Businesses: including descriptions and characteristics of small firms by size criteria vs. economic control criteria.
Forms of Business Ownership (proprietorship, partnership, corporation) and explaining their characteristics.
Role and Importance of Micro, Small Enterprises (MSEs) in Developing Countries: discusses the role in the economy and for the individual.
Organizational Structure and Entrepreneurial Team Formation: discusses building management teams and developing organizational cultures.
Main Supporting Packages for MSEs Development in Ethiopia: details of support packages for entrepreneurs in Ethiopia
Problems of small scale business in the Ethiopian context
Chapter Summary: reviews the challenges of starting small businesses in developing countries like Ethiopia

Contents (Chapter 4: Product/Service Development)

Introduction: describes the process of product development
Concept of Product/Service: identifies and describes the characteristics of products and how those elements provide customer satisfaction.
Product/Service Development Process: describes steps in the process of developing new products.
Intellectual Property Protection: explains forms like patents, trademarks, and copyrights in relation to product and service development.

Contents (Chapter 5: Marketing)

Introduction: definitions of marketing, activities and their goals.
Meaning and definitions of Marketing: discusses different perspectives by various authors on the concept of marketing and exchange.
Core Concepts of Marketing: includes needs, wants, and demands; products; value; cost; transactions and relationships; markets; and marketers/prospects.
Marketing Philosophies: discusses different marketing concepts and their practical strategies in the market (production concept, product concept, selling/sales concept, the marketing concept, the societal marketing concept).
Marketing Information Systems: describes the role of information systems in marketing decision-making.
Marketing Research: explains systematic and objective techniques for gathering, collecting, and analyzing information about the market, customers, and competition. Includes tasks of gathering, sorting, analyzing, and evaluating data.
Marketing Intelligence: describes the use of information systems for competitive analysis.
Competitive Analysis: defines competition and the need for competitive analysis (identifying competitors, gathering info on competitors, analyzing competition).
Marketing Mix / 4 P's: outlines the core elements of marketing strategy (Product, Pricing, Place, Promotion)
Marketing Strategy as a Process: analyzes how to develop marketing strategies that increase sales.

Contents (Chapter 6: Business Financing)

Introduction: identifies the different reasons for sourcing funds for business activities including capital assets and working capital.
Financial Requirements: categorizes funding methods into permanent capital, working capital, and asset finance.
Sources of Financing: identifies internal and external sources of finances
Permanent capital: funding from personal savings, friends/relatives, partners, public stock, angel investors, and venture capital companies
Leasing Financing: explaining finance and operating leasing
Micro-Financing: discusses microfinance institutions in Ethiopia.
Traditional Financing: identifies traditional forms of financial practices including Idirs and Iqubs in Ethiopia.
Crowd Funding: details advantages and types (donation-based, reward-based, equity-based).

Contents (Chapter 7: Managing Growth and Transition)

Introduction: discusses managing growth and transition for an organization.
Timmons Model of Entrepreneurship: discusses elements like identifying opportunities, building a team, and managing resources
New Venture Expansion Strategies: discusses methods such as market penetration, market development, product development, and diversification.
Business Ethics and Social Responsibility: describes different ethical approaches to business, including stakeholder theory and the triple bottom line. Includes discussion on ethical principles.

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Description

This quiz explores the vital role of entrepreneurs in economic development, including their impact on wealth generation and employment opportunities. Test your knowledge on the characteristics of entrepreneurial organizations and the importance of goal setting for entrepreneurs.