ECONOMICS

• Entrepreneurship


  The capacity and willingness to develop, organize, and manage a business venture along with any of its risks in order to make a profit

  It tries to identify the needs of the marketplace and to meet those needs by supplying a service or product

  The dynamic process of creating incremental wealth
• Definitions of the exploration of entrepreneurs in terms of Psychologist

  
  

  such person is typically driven by certain forces, the need to obtain or attain something, to experiment, to accomplish, or perhaps to escape the authority of others
• Reasons why people go into business for themselves

  • Some want to leave the fast-paced corporate environment
  • For others, the benefits of entrepreneurship do not out weight the disadvantage
• Inventors


  People who create something for the first time
• Inventors


  • Free thinkers, problem solvers able to reduce complex problems to simple ones, with a very high level of self-confidence, willing to take risks, and has the ability to tolerate ambiguity and uncertainty
  • Not likely to view monetary benefits as measure of success
• Characteristics of a Successful Entrepreneurs

  successful entrepreneurs are independent

  successful entrepreneurs are self-confident

  successful entrepreneurs have determination and perseverance

  successful entrepreneurs are goal-oriented

  successful entrepreneurs know what they want, and they are able to focus on achieving it

  successful entrepreneurs have a need to achieve and to set high standards for themselves

  successful entrepreneurs are creative

  successful entrepreneurs are able to act quickly
• Types of Entrepreneurial Business

  • Manufacturing
  • Wholesaling
  • Retailing
  • Service
• The Entrepreneurial Process

  1. Identification and evaluation of the opportunity

  2. Development of the business plan

  3. Determination of the required resources

  4. Management of the resulting enterprise
• A good business plan must be developed in order to exploit the defined opportunity
• Role of entrepreneurship in economic development (According to Hesrich et al, 2008)

  • Involves more than just increasing per capital output and income
  • Involves initiating and constituting change in the structure of business and society
• Ethical and Social Responsibility of Entrepreneurs


  • They seem to be particularly sensitive to peer pressure and general social norms in the community as well as pressures from their competitors
  • Must take risks with their capital in order to sell and deliver products and services while expanding growth energy more than the average business person in order to innovate
  • Tend to depend on their own personal system much more than other managers when determining ethical appropriate actions
• Investments


  The use of savings to become future income
• Different Kinds of Investments (Barth & Ramesh L. 2001)


  • Direct Investments
  • Indirect Investments
• Direct Investments


  • Business Investments – refers to accounting assets that are purchased in the hope of making money on their own, as opposed to something like a delivery car for a restaurant
  • Real Estate Investments – involves the purchase, ownership, management, rental, and/or sale of real estate for profit
• Indirect Investments

  • Saving Account
  • Bonds
  • Stocks
  • Mutual Funds
  • Life Insurance
• Common Stock


  A security that represents ownership in a corporation. This form of equity ownership typically yields higher rates of return long term
• Capital Gain


  The profits earned from the sale of stocks, real estate, or other income producing property
• Preferred Stocks


  A type of corporate security that has feature of both bonds and common stocks. Preferred holders have a no legal right to force a corporation to pay them the promised annual term
• Cash Value


  A mutual fund is a type of financial vehicle made up of a pool of money collected from many investors to invest in securities like stocks, bonds
• Broker


  An entity that facilitates the buying and selling of marketable securities like stocks and exchange traded funds
• In late 1990's and early 2000's, the start of buying and selling stocks electronically through computer
• Online Investing


  Also called electronic trading. Something you can do in seconds but before you do that, be clear about why you are buying or selling and the extent of risk on your investment
• Rent


  A payment of a factor of production in excess of its opportunity cost. It is what is paid to any input in more than you would have had to pay it
• Inframarginal Rent


  Quasi rent earned by a perfectly competitive firm in the short run
• Pure Economic Rent


  Any payment made to a factor of production or anything that is fixed in supply
• Quasi Rent


  In perfect competition, firms sell their product for just what it cost to produce it, so they earn no profit. The price they receive is equal to the marginal cost of producing the goods
• Unemployment


  When a person, who is actively searching for employment, is unable to find work
• Minimum Wage


  The lowest salary that employers can legally pay their workers
• Types of Unemployment

  • Frictional Unemployment - it arises when a person is in between jobs
  • Cyclical Unemployment - rises during recessions and declines during period of economic growth
  • Structural Unemployment - it comes about through technological advancement, when people lose their jobs because their skills are already outdated
• definitions of the exploration in terms of economists - an entrepreneur is one who brings resources, labor, materials, and other assets into combinations that make their value greater than before
• definitions of the exploration in terms of businessman - an entrepreneur appears as a threat, an aggressive competitor whereas to another business, as well as finds better ways to utilize resources, reduce waste, and produce jobs that others are glad to get