The Economic Way of Thinking 13th Edition by David Prychitko, Peter Boettke, Paul Heyne

Exercise 7

Are entrepreneurs necessarily capitalists?
(a) The text defines the entrepreneur as the one who assumes responsibility by guaranteeing all others a fixed amount for their cooperation. When and why do others trust the entrepreneur's guarantee? If this question seems abstract, ask yourself whether you will work hard for someone when you don't expect to see your first paycheck until you have worked three weeks. When and why will you not trust an employer in this way?
(b) Who besides employees typically receive guarantees from the entrepreneur that they must trust if they are to do business with the entrepreneur? What is the basis for their confidence in the entrepreneur's promises?
(c) Why do employees ever agree to let the employer have all the profits?
(d) Why do employers ever agree to guarantee the employee a certain wage, no matter how badly things turn out?