Entrepreneurship Basics

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Questions and Answers

What is the primary role of entrepreneurs in capital formation?

  • To increase the idle savings of the public
  • To reduce the national resources
  • To create wealth without investment
  • To mobilize public savings through industrial securities (correct)

What is the result of entrepreneurs' efforts to locate and exploit opportunities?

  • Decrease in per capita income
  • Stagnation in economic growth
  • Improvement in per capita income (correct)
  • Reduction in national resources

What is the purpose of intellectual property laws in entrepreneurship?

  • To provide exclusive business rights to ideas (correct)
  • To reduce the costs of research and development
  • To share ideas without any protection
  • To copy ideas cheaply

What would happen if an entrepreneur does not protect their ideas?

<p>Their ideas would be copied – cheaply (B)</p> Signup and view all the answers

What is the role of entrepreneurs in economic development?

<p>To initiate and sustain the process of economic development (B)</p> Signup and view all the answers

What is provided to entrepreneurs in exchange for sharing their ideas?

<p>Limited monopolies (B)</p> Signup and view all the answers

What is the key to successful domestic and international entrepreneurship?

<p>Identifying a market need and developing an idea to satisfy it (A)</p> Signup and view all the answers

What is international entrepreneurship?

<p>The process of an entrepreneur conducting business activities across national boundaries (D)</p> Signup and view all the answers

Which of the following is a source of information for entrepreneurs?

<p>Government sources (D)</p> Signup and view all the answers

What is the purpose of the ideation process?

<p>To satisfy a specific market need (B)</p> Signup and view all the answers

What is one way to identify an appropriate business opportunity?

<p>Identifying a market need and developing an idea to satisfy it (A)</p> Signup and view all the answers

What is an example of international entrepreneurship?

<p>Exporting goods and services to other countries (D)</p> Signup and view all the answers

What is the main characteristic of a Term Key Project in international business?

<p>A foreign entrepreneur supplies the manufacturing technology or infrastructure for a business and then turns it over to local owners. (D)</p> Signup and view all the answers

What is the primary difference between a Minority Interest and a Majority Interest in Foreign Direct Investment?

<p>The percentage of equity held by the investing entrepreneur in the foreign venture. (C)</p> Signup and view all the answers

What is the main purpose of a Management Contract in international business?

<p>To provide management techniques and skills to a foreign company. (B)</p> Signup and view all the answers

What is an example of a Horizontal Merger?

<p>A merger between two companies that produce the same type of product in the same geographic area. (B)</p> Signup and view all the answers

What is the main benefit of Foreign Direct Investment (FDI) for the host country?

<p>It leads to the transfer of technology and management skills to the host country. (D)</p> Signup and view all the answers

What is the main characteristic of a Joint Venture in Foreign Direct Investment?

<p>It is a partnership between two firms that share the equity in a third company. (D)</p> Signup and view all the answers

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Study Notes

Entrepreneurial Leadership

  • Leadership is essential to entrepreneurship, and it's up to the entrepreneur to take the idea and turn it into actions and products to capitalize on the opportunity.
  • The entrepreneur must take the lead for their ideas to come to fruition.

Intellectual Property Rights

  • Intellectual property laws provide exclusive business rights to ideas, allowing entrepreneurs to capitalize on them.
  • Protecting ideas prevents them from being copied, and once an idea is in the public domain, it may no longer be a competitive advantage.
  • Governments provide limited monopolies in exchange for sharing ideas, making up for research and development costs.

Role of Entrepreneurship in Economic Development

  • Entrepreneurs initiate and sustain economic development by:
    • Mobilizing idle savings of the public through industrial securities, leading to productive utilization of national resources.
    • Increasing the rate of capital formation, essential for rapid economic growth.
    • Locating and exploiting opportunities, improving per capita income.

International Entrepreneurship

  • Successful domestic and international entrepreneurship involves developing an idea that has a market for the new product/service.
  • Information sources for identifying opportunities include:
    • General information sources
    • Industry and market information sources
    • Competitive company and product/service information
    • Government sources
    • Search engines
    • Trade associations
    • Trade publications

Methods of International Business

  • International entrepreneurship involves conducting business activities across national boundaries.
  • Methods include:
    • Exporting
    • Licensing
    • Opening a sales office in another country
    • Term key projects
    • Management contracts
    • Foreign Direct Investment (FDI)
    • Joint Venture
    • Minority Interest
    • Majority Interest
    • Merger (including horizontal, vertical, and other types)

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