Enterprise, Business and the Economy Quiz

What is the role of an entrepreneur in the economy?

• To organize factors of production and create enterprises

• To provide public services

• To regulate market prices

• To solely maximize personal wealth

What can technological change result in?

• Increase in production costs

• Decrease in product quality

• Stagnation of the economy

• Improvements in efficiency and productivity

How have mobile phones changed due to technological advancements?

• Become cheaper to produce and improved in quality

• Decreased in quality

• Increased in price

• Remained unchanged

What is an example of creative destruction?

• The rise of downloadable films destroying the VHS market

• The increase in manual labor jobs

• The decrease in technological advancements

• The stabilization of traditional markets

Why are SMEs important for the economy?

• They increase unemployment

• They limit competition

• They monopolize the market

• They stimulate innovation and create jobs

Who proposed the idea of 'creative destruction'?

• Adam Smith

• John Maynard Keynes

• Joseph Schumpeter

• Milton Friedman

What happens to the least productive firms according to the concept of creative destruction?

• They are forced to leave the market

• They become monopolies

• They are unaffected by market changes

• They receive government subsidies

What must entrepreneurs consider when making decisions to operate, expand, and develop a business?

• Focusing solely on immediate profits

• Ignoring market trends

• Past mistakes, potential profitability, and market gaps

• Only their personal wealth

What is the incentive for an entrepreneur to take risks?

• Profit

• Avoiding innovation

• Public recognition

• Maintaining the status quo

How can entrepreneurs expand their business?

• By decreasing the number of employees

• By avoiding investments

• By reducing their product range

• By merging with another firm