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Assam ASSEB HS Entrepreneurship Development study materials
Assam ASSEB HS Entrepreneurship Development study resources

Assam ASSEB HS Entrepreneurship Development practice questions

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Question 1Entrepreneurship: Concept, Nature and Significance

In entrepreneurship literature, which statement best describes the nature of entrepreneurship as an economic activity?

  1. It is limited to inheriting and running a family business.
  2. It is a continuous process of identifying opportunities, mobilising resources and bearing risk. Correct answer.
  3. It is a one-time act of starting a business and then stops.
  4. It is mainly a hobby pursued without any economic purpose.

Explanation

Entrepreneurship is treated as an ongoing process rather than a single event: opportunities are spotted, resources are combined, and risk is borne in pursuit of profit. It is purposeful economic activity, not mere hobby or inheritance.

Question 2Entrepreneurship: Concept, Nature and Significance

Which of the following is the most accurate description of an entrepreneur as a risk-bearer?

  1. The entrepreneur avoids decisions that involve any possibility of loss.
  2. The entrepreneur accepts uncertainty about future returns on the resources committed. Correct answer.
  3. The entrepreneur transfers all business risk to employees through wages.
  4. The entrepreneur guarantees a fixed return to investors regardless of profit.

Explanation

Risk-bearing means the entrepreneur commits resources and accepts that returns are uncertain; losses fall on the entrepreneur's own capital and effort. Employees receive wages and generally do not carry the venture's business risk.

Question 3Entrepreneurship: Concept, Nature and Significance

A young person in Assam converts locally available bamboo into finished furniture and sells it in nearby towns. Which function of an entrepreneur does this best illustrate?

  1. Delegation of all decision-making to government agencies
  2. Avoidance of competition through monopoly power
  3. Reduction of output to keep prices artificially high
  4. Resource mobilisation and combination to create value Correct answer.

Explanation

Bringing together a local raw material, labour and market access to create a saleable product is the organising or resource-combining function. The entrepreneur adds value by transforming inputs into outputs that customers will buy.

Question 4Entrepreneurship: Concept, Nature and Significance

Which pair correctly distinguishes an entrepreneur from a manager?

  1. The entrepreneur avoids innovation, while a manager always introduces new products.
  2. The entrepreneur is appointed by a board, while a manager is the residual claimant.
  3. The entrepreneur works for a salary, while a manager owns the capital of the firm.
  4. The entrepreneur owns and bears risk, while a manager usually works for a salary and bears little business risk. Correct answer.

Explanation

Ownership and residual risk distinguish the entrepreneur from the salaried manager. The manager executes and coordinates within a framework set by owners, while the entrepreneur's return depends on the venture's success.

Question 5Entrepreneurship: Concept, Nature and Significance

An enterprise adopts a new method of packaging that lowers cost and reduces spoilage. In Schumpeterian terms, this is best classified as which type of innovation?

  1. Introduction of a new good
  2. Introduction of a new method of production Correct answer.
  3. Discovery of a new source of raw material
  4. Opening of a new market

Explanation

Schumpeter's categories separate new products, new methods, new markets, new input sources and new organisation. A cheaper or better way of doing things, including packaging and handling, belongs to the new-method category.

Question 6Entrepreneurship: Concept, Nature and Significance

Which statement correctly captures the relationship between entrepreneurship and economic development?

  1. Economic development always precedes entrepreneurship and is never influenced by it.
  2. Entrepreneurship only benefits the entrepreneur and never the wider economy.
  3. Entrepreneurship contributes to development by creating employment, spreading innovation and raising productivity. Correct answer.
  4. Entrepreneurship has no measurable link with employment or income growth.

Explanation

New and growing enterprises absorb labour, introduce new techniques and improve productivity, which together support income growth and structural change. The relationship is two-way, with development also encouraging further enterprise.

Question 7Entrepreneurship: Concept, Nature and Significance

A self-help group of women in a rural district starts a small food-processing unit and reinvests profits in training. Which significance of entrepreneurship is most directly demonstrated?

  1. Concentration of economic power in a few hands
  2. Elimination of all competition in the district
  3. Dependence on imported machinery alone
  4. Generation of local employment and empowerment Correct answer.

Explanation

Small local ventures create work and build skills among members, which illustrates employment generation and social empowerment. These are commonly cited contributions of entrepreneurship to balanced regional development.

Question 8Entrepreneurship: Concept, Nature and Significance

Which feature most clearly marks entrepreneurship as distinct from mere self-employment?

  1. Earning a fixed monthly income from one employer
  2. Repeating the same task under supervision
  3. Working only during fixed office hours
  4. Innovating and seeking growth beyond routine livelihood activity Correct answer.

Explanation

Self-employment provides a livelihood through routine work, whereas entrepreneurship involves innovation, opportunity pursuit and growth orientation. The presence of innovative effort and expansion ambition is the distinguishing feature.

Question 9Entrepreneurship: Concept, Nature and Significance

The term 'intrapreneur' is best defined as which of the following?

  1. An owner who sells the business to a competitor
  2. A government officer who regulates new firms
  3. An employee who develops innovative ideas and ventures within an existing organisation Correct answer.
  4. A person who buys shares of a large company on the stock exchange

Explanation

An intrapreneur applies entrepreneurial thinking inside an established organisation, using its resources to develop new products or processes. The individual is salaried but acts with initiative and risk-taking within the firm.

Question 10Entrepreneurship: Concept, Nature and Significance

Which of the following best explains why entrepreneurship is described as a 'creative' activity?

  1. It relies entirely on government orders for its output.
  2. It copies existing products without any change.
  3. It avoids any departure from established routines.
  4. It combines resources in new ways to produce goods, services or processes that did not exist before. Correct answer.

Explanation

Creativity in entrepreneurship lies in recombining resources and ideas into new offerings or methods. This is the sense in which enterprise is described as a creative and disruptive economic force.

Question 11Entrepreneurship: Concept, Nature and Significance

A trader buys goods in bulk and resells them at a margin without changing their form. Which type of entrepreneur does this describe?

  1. Industrial entrepreneur
  2. Agricultural entrepreneur
  3. Trading entrepreneur Correct answer.
  4. Corporate entrepreneur

Explanation

Trading entrepreneurs deal in buying and selling without transforming the product, while industrial entrepreneurs manufacture or process goods. The absence of any change in form is the identifying mark of the trading type.

Question 12Entrepreneurship: Concept, Nature and Significance

Which statement about the relationship between innovation and entrepreneurship is most defensible?

  1. Innovation is identical to invention and must always be patented.
  2. Innovation means only adopting digital technology.
  3. Innovation is irrelevant once a firm has customers.
  4. Innovation is the commercial application of an idea, which is central to entrepreneurial success. Correct answer.

Explanation

Invention creates a new idea or device, while innovation takes that idea to the market in a usable, value-generating form. Entrepreneurship depends on this commercialisation step, not merely on novelty.

Question 13Entrepreneurship: Concept, Nature and Significance

Which option correctly lists the three factors of production commonly said to be organised by the entrepreneur?

  1. Government, judiciary and police
  2. Imports, exports and tariffs
  3. Land, labour and capital Correct answer.
  4. Money, tax and subsidy

Explanation

The entrepreneur combines the classic factors of land, labour and capital into a productive enterprise and bears the resulting uncertainty. Tax, subsidy and public institutions are not factors of production in this sense.

Question 14Entrepreneurship: Concept, Nature and Significance

An entrepreneur starts a tea-processing unit in a district where tea leaves are abundant but processing facilities are scarce. Which basis for identifying an entrepreneurial opportunity does this illustrate?

  1. Government ownership of all processing units
  2. Availability of local raw material with unmet processing demand Correct answer.
  3. Complete absence of any market for tea
  4. High import duty on all consumer goods

Explanation

Entrepreneurial opportunity often arises where local resources exist but the capacity to add value is missing. The gap between raw-material supply and processing capacity signals a viable venture.

Question 15Entrepreneurship: Concept, Nature and Significance

Which of the following best describes the 'residual claimant' position of an entrepreneur?

  1. The entrepreneur receives a fixed wage fixed by the government.
  2. The entrepreneur receives whatever remains after all contractual payments are met. Correct answer.
  3. The entrepreneur's income is unrelated to the firm's profit.
  4. The entrepreneur is paid before all other parties are settled.

Explanation

The residual claimant is entitled to profit, which is what remains after wages, rent, interest and other dues are paid. This residual position is why entrepreneurial income is uncertain and can be negative.

Question 16Entrepreneurship: Concept, Nature and Significance

Which statement best captures the significance of entrepreneurship for balanced regional development?

  1. Entrepreneurship in backward regions can create local income and reduce migration by generating work where people live. Correct answer.
  2. Regional balance is achieved only through transfer payments from the central government.
  3. Enterprises tend to cluster only in already developed metropolitan areas.
  4. Small enterprises in rural areas contribute nothing to regional output.

Explanation

Local enterprise generates income and employment in the region itself, which can slow out-migration and spread economic activity. This decentralising effect is a recognised contribution to balanced regional development.

Question 17Entrepreneurship: Concept, Nature and Significance

A firm introduces a new organisation of work by forming autonomous teams and reducing supervisory layers. In Schumpeter's scheme, this is an example of which innovation type?

  1. New source of supply
  2. New organisation of an industry Correct answer.
  3. New method of production
  4. New market

Explanation

Schumpeter included the carrying out of a new organisation of an industry or enterprise among the forms of innovation. Reorganising work and management structures fits this category rather than product or market change.

Question 18Entrepreneurship: Concept, Nature and Significance

Which argument most strongly supports the claim that entrepreneurship promotes innovation-based competition rather than merely price competition?

  1. New entrants introduce new products and processes that make existing offerings obsolete. Correct answer.
  2. Competition ends once a firm obtains a licence.
  3. Firms compete only by reducing wages.
  4. Consumers always prefer the oldest available product.

Explanation

Schumpeterian competition works through new goods, methods and organisational forms that displace established ones, which is often called creative destruction. This differs from competition confined to price and output adjustments.

Question 19Entrepreneurship: Concept, Nature and Significance

Which statement correctly distinguishes an entrepreneur from an investor in a company?

  1. An investor provides funds and expects a return, while an entrepreneur organises and manages the venture and bears its operating risk. Correct answer.
  2. An entrepreneur guarantees returns to the investor without any risk.
  3. An entrepreneur and an investor are identical in function and risk.
  4. An investor manages daily operations, while an entrepreneur only supplies money.

Explanation

The investor supplies capital and seeks a return, whereas the entrepreneur combines resources, makes decisions and carries the venture's operating uncertainty. The roles can overlap but are conceptually distinct.

Question 20Entrepreneurship: Concept, Nature and Significance

A candidate argues that entrepreneurship is unnecessary in a labour-abundant economy because jobs can be created by large public works alone. Which criticism of this argument is most sound?

  1. Labour abundance removes the need for any investment.
  2. Large public works always generate profits for the state.
  3. Public works never create any employment.
  4. Enterprise creation adds productive capacity and innovation that public works alone cannot sustain. Correct answer.

Explanation

Public works can create short-term employment, but sustained growth needs productive enterprises that add capacity, innovate and generate recurring income. Entrepreneurship therefore complements rather than duplicates public employment schemes.

Question 21Entrepreneurship: Concept, Nature and Significance

Which of the following best explains why entrepreneurship is regarded as a dynamic process rather than a static state?

  1. It depends solely on inherited wealth.
  2. It responds to changing technology, tastes and policies by continuously adjusting opportunities and resources. Correct answer.
  3. It operates only in agriculture and never in services.
  4. It remains fixed once the initial business plan is written.

Explanation

Entrepreneurship is dynamic because opportunities and resource availability shift with technology, demand and policy, requiring continual adjustment. A static reading would ignore this adaptive, ongoing character.

Question 22Entrepreneurship: Concept, Nature and Significance

A firm that develops a new product but fails to bring it to market at a viable cost has performed which of the following?

  1. Both invention and successful innovation
  2. Neither invention nor innovation
  3. Invention without successful innovation Correct answer.
  4. Innovation without invention

Explanation

Invention is the creation of a new idea or device, while innovation requires successful commercial application. A product that never reaches the market viably remains an invention rather than an innovation.

Question 23Entrepreneurship: Concept, Nature and Significance

Which statement about the significance of entrepreneurship for employment is most accurate?

  1. Entrepreneurship reduces employment by definition.
  2. Only large firms ever create jobs.
  3. New and small enterprises contribute to employment growth, though their net job creation varies across contexts. Correct answer.
  4. Employment creation by small firms is impossible in developing economies.

Explanation

New and small enterprises are important sources of employment, especially in developing economies, though their net contribution depends on survival rates and local conditions. The claim is therefore qualified rather than absolute.

Question 24Entrepreneurship: Concept, Nature and Significance

A student notes that the same person can be an owner, manager and innovator in a small firm. What does this imply for the study of entrepreneurship?

  1. The roles are analytically distinct even when combined in one person. Correct answer.
  2. Ownership always excludes innovation.
  3. Small firms cannot be studied at all.
  4. The conceptual distinctions between roles are meaningless.

Explanation

Analytical categories separate ownership, management and innovation so that each function can be examined, even though one individual may perform several of them. Combination in practice does not erase the conceptual differences.

Question 25Entrepreneurial Competencies, Motivation and Mindset

In entrepreneurship development, which term best describes the inner force that drives a person to start and persist with a venture despite uncertainty?

  1. Motivation Correct answer.
  2. Seniority
  3. Inheritance
  4. Literacy

Explanation

Motivation refers to the internal drive that energises and directs behaviour toward a goal such as launching a business. It explains why an entrepreneur keeps going when returns are delayed and risks are high. Inheritance, seniority and literacy are unrelated personal or social attributes.

Question 26Entrepreneurial Competencies, Motivation and Mindset

According to McClelland's theory of motivation, which need is most closely associated with entrepreneurs who set moderate goals and want feedback on their performance?

  1. Need for security
  2. Need for affiliation
  3. Need for power
  4. Need for achievement Correct answer.

Explanation

McClelland identified the need for achievement (nAch) as the tendency to strive for success, prefer moderately challenging tasks and seek concrete feedback. Entrepreneurs are often described as having a high need for achievement. Affiliation concerns relationships, power concerns influence, and security concerns safety.

Question 27Entrepreneurial Competencies, Motivation and Mindset

A young entrepreneur in Guwahati keeps a written record of what went well and what failed after every customer interaction. Which entrepreneurial competency is being demonstrated most directly?

  1. Risk aversion
  2. Delegation of authority
  3. Self-monitoring and learning from feedback Correct answer.
  4. Networking ability

Explanation

Self-monitoring involves observing one's own performance and correcting behaviour using feedback. Keeping a reflective record of successes and failures is a direct application of this competency. Networking concerns building contacts, risk aversion concerns avoiding risk, and delegation concerns assigning work.

Question 28Entrepreneurial Competencies, Motivation and Mindset

Which statement best distinguishes an entrepreneur's internal locus of control from an external locus of control?

  1. Internals believe outcomes depend mainly on their own actions, while externals attribute outcomes to luck or outside forces Correct answer.
  2. Internals avoid all risk, while externals actively seek risk
  3. Internals prefer wage employment, while externals prefer self-employment
  4. Internals rely on government subsidies, while externals rely on family savings

Explanation

Locus of control describes where a person places responsibility for outcomes. People with an internal locus believe their own effort and decisions shape results, while those with an external locus attribute results to fate, luck or powerful others. The other options confuse locus of control with funding sources, risk preference or employment choice.

Question 29Entrepreneurial Competencies, Motivation and Mindset

An entrepreneur who converts a threat into an opportunity by reworking a product after a market setback is displaying which competency?

  1. Opportunity seeking
  2. Information seeking
  3. Initiative and problem solving Correct answer.
  4. Persuasion

Explanation

Initiative and problem solving refer to acting without being told and finding practical ways around obstacles. Reworking a product after a setback is a problem-solving response to a difficulty. Opportunity seeking concerns spotting new possibilities, information seeking concerns gathering data, and persuasion concerns influencing others.

Question 30Entrepreneurial Competencies, Motivation and Mindset

Which of the following best describes the achievement motivation pattern that research links with successful entrepreneurship?

  1. Preferring tasks assigned by others so that responsibility is shared
  2. Preferring very difficult tasks so that failure carries no blame
  3. Preferring very easy tasks so that success is guaranteed
  4. Preferring moderately challenging tasks and taking personal responsibility for results Correct answer.

Explanation

High achievers tend to choose tasks of moderate difficulty where success depends on their own skill and effort. They also prefer situations in which they can take personal responsibility for outcomes and receive feedback. Very easy or very difficult tasks, and tasks where responsibility is shared, do not fit this pattern.

Question 31Entrepreneurial Competencies, Motivation and Mindset

A candidate for an entrepreneurship course says, 'I can learn the skills needed to run a business.' This statement reflects which mindset component?

  1. Status quo bias
  2. Growth mindset Correct answer.
  3. Fixed mindset
  4. Fatalism

Explanation

A growth mindset is the belief that abilities can be developed through effort, learning and practice. Believing that business skills can be learned is a direct expression of this belief. A fixed mindset treats ability as innate, fatalism treats outcomes as predetermined, and status quo bias favours existing arrangements.

Question 32Entrepreneurial Competencies, Motivation and Mindset

In the Kakinada experiment conducted by McClelland, what was the main objective of training participants in achievement motivation?

  1. To encourage participants to take up entrepreneurial activity Correct answer.
  2. To promote membership of trade unions
  3. To train participants for government clerical posts
  4. To reduce the size of the local labour force

Explanation

The Kakinada experiment was designed to test whether achievement motivation could be developed through training and whether this would encourage entrepreneurial behaviour. It is a classic Indian example of motivation training linked to enterprise creation. The other options describe unrelated objectives.

Question 33Entrepreneurial Competencies, Motivation and Mindset

An entrepreneur who regularly attends industry fairs, reads trade journals and surveys competitors before launching a product is strongest in which competency?

  1. Commitment to work contract
  2. Persuasion
  3. Calculated risk taking
  4. Information seeking Correct answer.

Explanation

Information seeking is the competency of gathering market, technical and competitive data to reduce uncertainty before decisions. Fairs, journals and competitor surveys are classic information-gathering activities. Persuasion concerns influence, calculated risk taking concerns assessing odds, and commitment to work contract concerns honouring obligations.

Question 34Entrepreneurial Competencies, Motivation and Mindset

Which pair of competencies is most directly involved when an entrepreneur negotiates credit terms with a supplier and then delivers goods on the promised date?

  1. Information seeking and self-confidence
  2. Systematic planning and monitoring
  3. Opportunity seeking and persistence
  4. Persuasion and commitment to work contract Correct answer.

Explanation

Negotiating credit terms requires persuasion, the ability to influence others to agree. Delivering on the promised date reflects commitment to the work contract, which is the concern for meeting obligations to customers and suppliers. The other pairs describe different competencies that are not illustrated by these two actions.

Question 35Entrepreneurial Competencies, Motivation and Mindset

Which statement best explains why an entrepreneur's self-confidence is considered a competency rather than a personality trait?

  1. It is fixed at birth and cannot change
  2. It is measured only by formal academic degrees
  3. It is relevant only to large corporations
  4. It can be strengthened through mastery experiences and feedback Correct answer.

Explanation

Competencies are learnable behaviours and capabilities, and self-confidence can be built through mastery experiences, preparation and feedback. Viewing it as a competency means it can be developed through training and practice. The other options treat self-confidence as fixed, credential-based or limited to particular organisations.

Question 36Entrepreneurial Competencies, Motivation and Mindset

An entrepreneur sets a target of reaching 200 customers in six months and reviews weekly sales figures against that target. Which competency is most evident?

  1. Persuasion
  2. Dependency on others
  3. Risk aversion
  4. Systematic planning and monitoring Correct answer.

Explanation

Systematic planning and monitoring involve setting measurable goals, breaking work into steps and tracking progress against them. A customer target with weekly reviews is a clear example. Persuasion concerns influence, risk aversion concerns avoiding risk, and dependency concerns relying on others.

Question 37Entrepreneurial Competencies, Motivation and Mindset

Which of the following is the best example of a calculated risk taken by a small enterprise owner?

  1. Borrowing without any repayment plan
  2. Buying lottery tickets with the firm's working capital
  3. Ignoring all market data and expanding immediately
  4. Investing savings in a new outlet after estimating demand and setting a loss limit Correct answer.

Explanation

Calculated risk taking involves assessing available information, estimating possible gains and losses, and taking action with a limit on exposure. Estimating demand and setting a loss limit fits this definition. The other options involve gambling, ignoring data or borrowing without a repayment plan.

Question 38Entrepreneurial Competencies, Motivation and Mindset

A student argues that entrepreneurs are born, not made, and therefore training cannot create entrepreneurs. Which evidence most directly challenges this belief?

  1. Most entrepreneurs inherit family businesses
  2. Some entrepreneurs have college degrees
  3. Achievement motivation training has helped participants start new ventures Correct answer.
  4. Business cycles affect all firms equally

Explanation

If motivation and competencies can be developed through training, and trained participants go on to start ventures, then entrepreneurship is at least partly made rather than purely inborn. Experiments such as the Kakinada study support this view. Inheritance, education levels and business cycles do not address whether training can create entrepreneurs.

Question 39Entrepreneurial Competencies, Motivation and Mindset

According to Maslow's hierarchy of needs, which level must generally be satisfied before a person strongly pursues esteem needs?

  1. Esteem needs themselves
  2. Aesthetic needs only
  3. Safety and physiological needs Correct answer.
  4. Self-actualisation

Explanation

Maslow arranged needs in a hierarchy in which lower-level physiological and safety needs are generally satisfied before higher-level social, esteem and self-actualisation needs become strong motivators. Esteem needs therefore follow the satisfaction of basic and safety needs. Esteem cannot precede itself, and self-actualisation is higher still.

Question 40Entrepreneurial Competencies, Motivation and Mindset

An entrepreneur insists on doing every task personally and refuses to let employees make decisions. Which competency weakness does this illustrate?

  1. Excessive information seeking
  2. Poor delegation and inability to build a team Correct answer.
  3. Weak opportunity identification
  4. Lack of persistence

Explanation

Refusing to let others decide and doing everything personally indicates weak delegation and team-building ability. Growth requires sharing authority with competent employees. The behaviour described is not about spotting opportunities, gathering too much information or giving up too soon.

Question 41Entrepreneurial Competencies, Motivation and Mindset

Which statement about the relationship between motivation and entrepreneurial competency is most accurate?

  1. Motivation alone guarantees business success regardless of skills
  2. Competencies are irrelevant once a person is highly motivated
  3. Motivation supplies the drive to act, while competencies supply the ability to act effectively Correct answer.
  4. Motivation and competencies are identical concepts

Explanation

Motivation and competency are complementary: motivation provides the willingness and energy to pursue a goal, while competencies provide the knowledge, skills and behaviours needed to execute. High motivation without competence may lead to repeated errors, and competence without motivation may remain unused. They are related but distinct concepts.

Question 42Entrepreneurial Competencies, Motivation and Mindset

Which of the following best defines an entrepreneurial competency?

  1. An underlying characteristic that enables superior performance in creating and running a venture Correct answer.
  2. A government licence required to start a business
  3. A loan scheme available to small firms
  4. A tax concession granted to new enterprises

Explanation

An entrepreneurial competency is an underlying characteristic, such as a skill, motive or behaviour, that enables a person to perform effectively in identifying and running a venture. Licences, loan schemes and tax concessions are external supports, not personal competencies.

Question 43Entrepreneurial Competencies, Motivation and Mindset

A woman in a rural area starts a small food-processing unit after noticing that local farmers waste surplus produce. Which competency is most clearly shown by noticing this gap?

  1. Opportunity seeking Correct answer.
  2. Information seeking
  3. Commitment to work contract
  4. Self-confidence

Explanation

Opportunity seeking is the competency of noticing unmet needs and gaps in the market that can be turned into a venture. Spotting wasted surplus produce and seeing a processing business in it is a clear example. Commitment to work contract concerns honouring obligations, self-confidence concerns belief in oneself, and information seeking concerns gathering data.

Question 44Entrepreneurial Competencies, Motivation and Mindset

Which of the following best describes the role of persistence as an entrepreneurial competency?

  1. Changing goals whenever a difficulty appears
  2. Copying the plans of competitors without change
  3. Avoiding goals that involve any uncertainty
  4. Continuing effort toward a goal despite obstacles and setbacks Correct answer.

Explanation

Persistence is the willingness to keep working toward a goal in the face of obstacles, rejection and slow results. It is distinguished from rigidity because persistent entrepreneurs adapt tactics while keeping the goal. Abandoning goals at the first difficulty or avoiding uncertainty describes the opposite behaviour.

Question 45Entrepreneurial Competencies, Motivation and Mindset

An entrepreneur borrows heavily to expand into a market she has not researched, saying, 'Entrepreneurs must gamble to grow.' Which criticism of this reasoning is most valid?

  1. It is valid because market research always delays growth
  2. It is invalid only because the entrepreneur is a woman
  3. It confuses calculated risk taking with gambling because no assessment or loss limit is involved Correct answer.
  4. It is valid because all expansion requires unplanned borrowing

Explanation

Calculated risk taking requires assessing information and limiting exposure, whereas gambling relies on chance without analysis. Expanding into an unresearched market with heavy borrowing removes both assessment and a loss limit. The other options either endorse reckless behaviour or rely on an irrelevant personal characteristic.

Question 46Entrepreneurial Competencies, Motivation and Mindset

Which of the following best describes the difference between intrinsic and extrinsic motivation for an entrepreneur?

  1. Intrinsic motivation comes from interest and satisfaction in the work, while extrinsic motivation comes from external rewards such as money or recognition Correct answer.
  2. Intrinsic motivation comes from money, while extrinsic motivation comes from personal interest
  3. Intrinsic motivation applies only to employees, while extrinsic motivation applies only to owners
  4. Intrinsic and extrinsic motivation are the same thing described in different words

Explanation

Intrinsic motivation arises from internal satisfaction, such as enjoyment of creative work or a sense of purpose. Extrinsic motivation arises from external outcomes such as profit, awards or social recognition. The two can operate together, but they are distinct sources of drive.

Question 47Entrepreneurial Competencies, Motivation and Mindset

A team of students running a campus enterprise reviews its sales data monthly, identifies a falling product line and drops it. Which combination of competencies does this best illustrate?

  1. Monitoring performance and adapting through problem solving Correct answer.
  2. Persuasion and networking
  3. Risk aversion and dependency
  4. Opportunity seeking and information seeking only

Explanation

Monthly review of sales data reflects monitoring, and dropping a failing product line reflects problem solving and adaptation. Together they show a feedback-driven approach to managing the venture. Persuasion, networking, risk aversion and dependency are not the behaviours described.

Question 48Entrepreneurial Competencies, Motivation and Mindset

Which of the following statements about the need for power in McClelland's theory is correct?

  1. It refers to the desire for job security and stable income
  2. It refers to the desire to influence or control others and can be channelled into leadership Correct answer.
  3. It refers to the desire for close friendships and group harmony
  4. It refers to the desire to meet high personal standards of excellence

Explanation

In McClelland's framework the need for power is the desire to influence, control or have impact on others. When directed toward organisational goals it can support leadership and institution building. Close friendships reflect affiliation, standards of excellence reflect achievement, and security is not one of the three needs.

Question 49Idea Generation, Creativity and Innovation

In entrepreneurship, the term 'idea generation' most precisely refers to which activity?

  1. The systematic process of creating, collecting and screening new business ideas Correct answer.
  2. The process of preparing the final profit-and-loss statement of a venture
  3. The task of recruiting workers for a newly opened production unit
  4. The activity of registering a company name with the Registrar of Companies

Explanation

Idea generation is the front end of the entrepreneurial process, where many possible opportunities are produced and then filtered before any investment is made. Registration, financial statements and recruitment all occur after an idea has already been selected and are therefore not part of generation itself.

Question 50Idea Generation, Creativity and Innovation

A young entrepreneur in Assam notices that local households throw away large quantities of banana stems after harvest. She designs a small unit that extracts fibre from these stems for making handicraft items. Which source of business idea does this best illustrate?

  1. Following a government notification on tax rates
  2. Observation of an unused local resource and its possible value Correct answer.
  3. Copying the franchise model of a foreign restaurant chain
  4. Purchasing an idea from a trade journal advertisement

Explanation

This is an opportunity spotted by observing waste from an existing local activity and imagining a new use for it, which is a classic observation-based source of ideas. The other options describe buying, copying or reacting to external information rather than noticing a resource in one's own environment.