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Questions and Answers
What is innovation?
The practical implementation of ideas that result in the introduction of new goods or services or improvements in offering goods or services.
What is innovation in entrepreneurship?
The practice of creating new business ideas and plans with the intention of generating profits, helping the community, and accompanying company goals.
Economic resources are inputs to the production of goods and services, which include land, labor, ______, and technology.
capital
What are natural resources used in the production of goods known as?
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What is the work effort used in the production of goods and services called?
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What are physical goods that are produced and used to produce other goods called?
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What do economies of scale refer to?
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What is a bond?
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Stocks are generally more stable than bonds.
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What is the relationship between stocks and bonds in terms of investment returns?
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Study Notes
Innovation Theory
- Innovation is the practical implementation of ideas, leading to new or improved goods and services.
- In entrepreneurship, innovation involves creating new business ideas and plans aimed at generating profits and benefiting the community.
Keynesian Theory
- Emphasizes the role of government intervention in stabilizing the economy.
- Suggests that increased public spending can help stimulate demand and economic growth.
Alfred Marshall Theory
- Focuses on the principles of supply and demand determining prices.
- Introduced concepts like elasticity of demand and external economies.
Risk & Uncertainty-Bearing Theory
- Explores how entrepreneurs assume risks in uncertain environments to seek profits.
- Discusses the balance between risk-taking and potential rewards in decision-making processes.
Economic Resources
- Inputs necessary for the production of goods and services, including land, labor, capital, and technology (or entrepreneurship).
Land
- Represents natural resources used in production, including materials such as lumber, minerals, and energy resources.
Labor
- Refers to the work effort required for production, encompassing the number of workers and hours worked.
Capital
- Comprises physical goods produced for creating other goods, like machinery, technology, and tools used in production processes.
Technology/Entrepreneurship
- The ability to combine productive resources into goods and services, driving innovation and efficiency in businesses.
Economies of Scale
- Cost advantages gained when firms increase output levels, reducing per-unit fixed costs with higher production volumes.
Stocks
- Securities traded in markets where investors buy and sell company shares. Includes both formal exchanges and over-the-counter (OTC) transactions.
Bonds
- Loans made by bondholders to issuers (governments or corporations) for capital needs.
- Investors lend money in exchange for interest payments and eventual return of principal.
Stocks vs. Bonds
- Stocks provide higher long-term return potential at greater risk, while bonds are more stable but offer lower long-term returns.
- Diversifying investments across different asset types can reduce overall portfolio risk.
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Description
Explore various theories of innovation and their implications in entrepreneurship. This quiz covers significant concepts including Keynesian theory and the risk-bearing theory. Test your understanding of how innovation drives business and community advancements.
