Entrepreneurship and Wealth Creation

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Questions and Answers

How does an entrepreneur view risk in a business?

Believes business risk is a deterrent and must be avoided

Does not consider business risk

Passively accepts business risk

Takes and faces the business risk squarely (correct)

How does an ordinary small business owner perceive competition?

Does not consider competition

Perceives it as an unhealthy element in the business environment (correct)

Viewed as a sign of a healthy economic environment

Views it as an opportunity for growth

What is the attitude of an entrepreneur towards changes in the environment?

Avoids any change in the environment

Reacts negatively to changes

Passively ignores changes

Reacts positively to changes (correct)

How does an ordinary small business owner finance their business primarily?

Depends solely on personal resources Signup and view all the answers

What type of development plan does an ordinary small business rely on?

Depends on chance and luck Signup and view all the answers

How does an entrepreneur direct their business horizon?

Thinks globally but acts locally Signup and view all the answers

What is the primary driving element of entrepreneurship according to Max Weber's Sociological Theory?

Customs and traditions Signup and view all the answers

According to Kaldor’s Technological Theory, what would happen if modern technology application is absent in entrepreneurship?

Slow economic development Signup and view all the answers

In Leibenstein’s Gap Filling Theory, what is the primary role of entrepreneurship in any economic activity?

Filling existing gaps Signup and view all the answers

What are the two major attributes of entrepreneurship according to Kirzner’s Learning-Alertness Theory?

Alertness and technological advancements Signup and view all the answers

How do the motives differ between an Entrepreneur and an Ordinary Small Business owner based on the text?

Source of livelihood vs. Financial gain Signup and view all the answers

Which theory emphasizes the importance of performing entrepreneurial activities in line with good customs and traditions?

Weber’s Sociological Theory Signup and view all the answers

Which term equates wealth with profit in small businesses?

Leibenstein's Gap Filling Theory Signup and view all the answers

What is the primary focus of entrepreneurship?

Wealth creation rather than profit generation Signup and view all the answers

What type of businesses fall under the concept of intrapreneurship according to the text?

Businesses managed by others for the owners' benefit Signup and view all the answers

How is wealth defined in the context of the text?

Abundance of money, property, or possession Signup and view all the answers

What criterion must be met for a business to be considered entrepreneurial?

Ownership and management by the same person Signup and view all the answers

How does entrepreneurship differ from ordinary small businesses in terms of wealth creation?

Creating wealth through increased business value and owner's prosperity Signup and view all the answers

Study Notes

Perception of Risk in Business

Entrepreneurs take and face business risks squarely, whereas ordinary small businesses believe risk is a deterrent and must be avoided.

Reactions to Changes in the Environment

Entrepreneurs react positively to changes in the environment, whereas ordinary small businesses are passive and static.

View on Competition

Entrepreneurs view competition as a sign of a healthy economic environment, whereas ordinary small businesses see it as an unhealthy element.

Vision for Development and Growth

Entrepreneurs have a clear business plan, whereas ordinary small businesses rely on chance and luck.

Horizon of Business Operation

Entrepreneurs think globally but act locally, whereas ordinary small businesses are centered only on the local environment.

Source of Business Funds

Entrepreneurs use internal and external resources, whereas ordinary small businesses are limited to personal resources.

Wealth Creation

Entrepreneurship is about creating wealth, not just generating profit.
Wealth is defined as the abundance of money, property, or possessions.
Wealth is created when the value of the business increases and the life of its owner improves.

Providing Valuable Goods and Services

Value is the opposite of waste.
Products and services are valuable when they provide additional benefits to buyers and users.

Self-Owned Enterprise

Entrepreneurship involves opening and managing a self-owned business.
A business is considered self-owned when the person managing its daily activities is also its owner.

Weber's Sociological Theory

Social cultures are the primary driving elements of entrepreneurship.

Kaldor's Technological Theory

Modern technology is an essential factor in production.

Leibenstein's Gap Filling Theory

Entrepreneurship fills gaps in the market by recognizing trends.

Kirzner's Learning-Alertness Theory

Spontaneous learning and alertness are key attributes of entrepreneurship.
Entrepreneurs must be alert in recognizing opportunities and consumer ignorance.

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Description

Explore the concept of entrepreneurship and wealth creation, and how it differs from solely focusing on profit generation. Learn about the abundance of money, property, and possessions that contribute to wealth, and how it reflects the value of a business and the well-being of its owner.