Question 1

Voluntarism is the idea that human will and human efforts decide the outcome of various events, in other words the concept of human agency.

Accepted Answer

A) True 
 B)False  True

Question 2

Frank Knight differentiated between uncertainty and risk, implying uncertainty - as opposed to risk (such as a game of roulette) - is incalculable and cannot be assessed rationally.

Accepted Answer

A) True 
 B)False  True

Question 3

The book discusses two opposing systems of thought. One is a Darwinist, evolutionary process with the final solution unknown, while the other is a more Newtonian, mechanistic process with a predetermined end. The first is dynamic and voluntary, while the other is static and deterministic.

Accepted Answer

A) True 
 B)False  True

Question 4

The term "homo economicus" - economic man - sums up the fundamental assumption national economy holds of humanity as:

Accepted Answer

A)   an economist who manages a household on a tight budget
B)   a person who is interested in finances
C)   a male economist
D)   a component who rationally reacts to various economic stimuli in the economic system
E)   a rational entity whose calculated decisions maximize his or her personal utility

Question 5

Evolutionary development means that something changes gradually from one form to another.

Accepted Answer

A) True 
 B)False

Question 6

The book is based upon four factors/components which can be considered the building blocks of entrepreneurship. These are:

Accepted Answer

A)   environment, traits, profitability and process
B)   environment, person(s) , opportunity and process
C)   environment, risks, evaluation and process
D)   the individual, process, risks and the economy

Question 7

Say and Cantillon launched the notion of subjective utility. This states that:

Accepted Answer

A)   the utility the customer perceives affects the value and thus the price of a good
B)   the subjective should not be taken into consideration when setting the price
C)   price is a subjective experience
D)   production costs define the price of a good

Question 8

In Chapter 1, economic thinking is discussed around a model of the "zero-sum game." This implies:

Accepted Answer

A)   that one player's gain is another one's loss
B)   that the economy is essentially dynamic and value-adding
C)   that the economy is essentially static
D)   that the economy can be viewed as a casino for gamblers
E)   that the sum of all efforts is often zero for everyone

Question 9

An essential feature of the Austrian School is its affirmation of subjectivism (opposite: objectivism). This school believes that:

Accepted Answer

A)   entrepreneurs are exceptionally subjective
B)   non-entrepreneurs should be viewed as subjects
C)   subjectivity is superior to objectivity
D)   reality is given to us and essentially impossible to impact
E)   the reality we consider relevant is socially constructedF)  humanity's subjective notion of the world must always be taken into considerationG)  reality is continuously being socially constructed

Question 10

According to Jean-Baptiste Say, the entrepreneur's task is to shift the factors of production - such as labor, capital and natural resources - "out of an area of lower and into an area of higher productivity and greater yield." In other words:

Accepted Answer

A)   entrepreneurs are highly productive
B)   entrepreneurs are generators of value in the economy
C)   factors of production are moved from one country to another
D)   factors of production tend to increase in value over time
E)   the same resources can be more useful and valuable in new combinations and contexts

Question 11

Determinism implies that every event is predetermined, that events are the inevitable result of pre-ordained conditions.

Accepted Answer

A) True 
 B)False

Question 12

Schumpeter stated that "the carrying out of new combinations" is the trademark of innovation. He detailed this by placing new developments - innovation - in five categories. Which three DO NOT belong here?

Accepted Answer

A)   new goods, new qualities
B)   new markets
C)   new methods
D)   new meeting places
E)   new forms of organizationF)  new tax lawsG)  new support systemsH) new sources of raw materials

Question 13

Many have shown how entrepreneurs are dependent on institutions. What do institutions signify in this context?

Accepted Answer

A)   the authorities and public organizations which impact entrepreneurship
B)   the rules of the game which society expresses in the form of systems of rewards, conventions, laws, traditions and values
C)   supporting organizations or institutions which assist entrepreneurs in the startup phase
D)   theories pertaining to entrepreneurship and business ownership

Question 14

In his early work, Israel Kirzner identifies "alertness" as the entrepreneur's distinguishing characteristic. In other words, entrepreneurs are alert to gaps in the market, and respond by filling them.

Accepted Answer

A) True 
 B)False

Question 15

Creative destruction is a key concept of Schumpeter's, which sets out to clarify innovation and economic growth. In other words, it means:

Accepted Answer

A)   that creative people destroy economic circulation
B)   that the new and improved replaces the old, keeping the economy going non-stop
C)   that entrepreneurs are the ones who make it happen
D)   that the economy's natural impulse to restore balance is fueled by entrepreneurs

Question 16

Certain fundamental features of the Austrian School are its thoughts on the human being. In other words:

Accepted Answer

A)   differences between people are more interesting than their similarities
B)   a human is only understandable on the basis of his/her subjective perception of a situation
C)   humans are bundles of reflexes that respond to simple stimuli
D)   humans are biological beings programmed to react in certain manners
E)   human beings are social and cultural creatures who constantly interpret their surroundings and ascribe personal meaning to situations and eventsF)  human beings are able to comprehend decisions after thorough and utility-based analysisG)  human beings react rationally to economic stimuli/incentives

Question 17

A central linchpin in the Austrian School is that it views the economic sciences primarily as a theory of:

Accepted Answer

A)   the invisible hand's allocation of resources
B)   human decisions/decision-making
C)   human actions
D)   the manner in which production function handles various choices
E)   supply, demand and price mechanisms

Question 18

In this context if something is dynamic, it implies that it is developing, in constant movement.

Accepted Answer

A) True 
 B)False

Question 19

Jean-Baptiste Say is the man behind Say's Law, which states that:

Accepted Answer

A)   demand creates supply
B)   supply creates its own demand

Question 20

Economic flow or circulation was introduced by French physiocrats, who expressed for the first time that the economy be conceived as:

Accepted Answer

A)   circulating the transformation of natural resources into goods
B)   a cycle of increases, prosperity and stagnation
C)   if landowners, farmers and buyers purchase independently of one another
D)   a small group of people controlling economic development
E)   a system of interdependencies, in this case between landowners, farmers and buyers

Exam 1: The Rise, Fall and Return of the Entrepreneur

Voluntarism is the idea that human will and human efforts decide the outcome of various events, in other words the concept of human agency.

Frank Knight differentiated between uncertainty and risk, implying uncertainty - as opposed to risk (such as a game of roulette) - is incalculable and cannot be assessed rationally.

The book discusses two opposing systems of thought. One is a Darwinist, evolutionary process with the final solution unknown, while the other is a more Newtonian, mechanistic process with a predetermined end. The first is dynamic and voluntary, while the other is static and deterministic.

The term "homo economicus" - economic man - sums up the fundamental assumption national economy holds of humanity as:

Evolutionary development means that something changes gradually from one form to another.

The book is based upon four factors/components which can be considered the building blocks of entrepreneurship. These are:

Say and Cantillon launched the notion of subjective utility. This states that:

In Chapter 1, economic thinking is discussed around a model of the "zero-sum game." This implies:

An essential feature of the Austrian School is its affirmation of subjectivism (opposite: objectivism) . This school believes that:

According to Jean-Baptiste Say, the entrepreneur's task is to shift the factors of production - such as labor, capital and natural resources - "out of an area of lower and into an area of higher productivity and greater yield." In other words:

Determinism implies that every event is predetermined, that events are the inevitable result of pre-ordained conditions.

Schumpeter stated that "the carrying out of new combinations" is the trademark of innovation. He detailed this by placing new developments - innovation - in five categories. Which three DO NOT belong here?

Many have shown how entrepreneurs are dependent on institutions. What do institutions signify in this context?

In his early work, Israel Kirzner identifies "alertness" as the entrepreneur's distinguishing characteristic. In other words, entrepreneurs are alert to gaps in the market, and respond by filling them.

Creative destruction is a key concept of Schumpeter's, which sets out to clarify innovation and economic growth. In other words, it means:

Certain fundamental features of the Austrian School are its thoughts on the human being. In other words:

A central linchpin in the Austrian School is that it views the economic sciences primarily as a theory of:

In this context if something is dynamic, it implies that it is developing, in constant movement.

Jean-Baptiste Say is the man behind Say's Law, which states that:

Economic flow or circulation was introduced by French physiocrats, who expressed for the first time that the economy be conceived as: