Capital and Entrepreneurship Quiz

Which of the following is NOT a characteristic of capital?

Theory Questions

1. Capital and Entrepreneur
   a. Define capital as a factor of production.
   b. Explain four characteristics of capital.
   c. Outline three reasons why capital is important in production.
   d. Who is an entrepreneur?
   e. List and explain three functions of an entrepreneur.

2. Division of Labour and Specialization
   a. Define division of labour.
   b. Explain the origin of division of labour.
   c. State four advantages of division of labour.
   d. Highlight three disadvantages of division of labour.
   e. Explain two limitations of specialization.

3. Scale of Production
   a. What is meant by scale of production?
   b. Differentiate between small-scale and large-scale production.
   c. Explain two internal economies of scale.
   d. Describe two external economies of scale.
   e. Identify two diseconomies of scale and explain them.

4. Firm and Industry
   a. Define a firm and an industry.
   b. Differentiate between a firm and a plant.
   c. List and explain three factors that determine the size of a firm.
   d. Define Total Product (TP), Marginal Product (MP), and Average Product (AP).
   e. Explain the relationship between TP, MP, and AP.

5. Population and Population Census
   a. Define population.
   b. Explain three factors that influence population growth.
   c. What is a population census?
   d. Describe two methods of conducting a population census.
   e. State two problems associated with conducting a population census.

• It is man-made

• It is subject to depreciation

• It is a free gift of nature

• It enhances production

An entrepreneur is responsible for:

• Providing only capital

• Organizing factors of production

• Consuming goods and services

• Regulating market prices

The major advantage of division of labour is:

• Increased efficiency

• Reduced worker boredom

• Elimination of unemployment

• Decreased interdependence

Which of the following is a limitation of specialization?

• Reduction in output

• Increased production cost

• Risk of job loss due to mechanization

• Decreased worker skills

Which of the following is an example of internal economies of scale?

• Reduced government taxes

• Increased bargaining power with suppliers

• Better transport networks

• Government subsidies

A small-scale industry is characterized by:

• Large capital investment

• High level of automation

• Low capital and fewer workers

• High level of division of labour

A firm can be defined as:

• A place where goods are sold

• A business unit that produces goods and services

• A large organization

• A group of industries

Which of the following determines the size of a firm?

• The price of raw materials

• The amount of capital and labour employed

• The number of government policies

• The wages of employees

Total product (TP) refers to:

• The output produced by one worker

• The change in total output due to an extra unit of input

• The total output produced from all inputs

• The difference between marginal and average product

A major disadvantage of a sole proprietorship is:

• Unlimited liability

• Easy decision-making

• Full control by the owner

• Access to quick loans