Economics ppt lesson 5

• Entrepreneurship


  The process of identifying, creating, and pursuing opportunities to develop and manage innovative business ventures
• Entrepreneur


  A person who sets up a business or businesses, taking on financial risks in the hope of profit
• Employees


  A person employed for wages or salary, especially at non-executive level
• Inventors


  A person who invented a particular process or device or who invents things as an occupation
• Types of Entrepreneurial Business

  • Manufacturing
  • Wholesaling
  • Retailing
  • Service
• Characteristics of a Successful Entrepreneur

  • Independent
  • Self-confident
  • Determined and perseverance
  • Goal-oriented
  • Know what they want and able to focus on achieving it
  • Have a need to achieve and set high standards
  • Creative
  • Able to act quickly
• 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
• Different kinds of Investment

  • Direct Investment
  • Indirect Investment
• Real Estate


  The land and any permanent structures, like a home, or improvements attached to the land, whether natural or man-made
• Indirect Investments

  • Savings Account
  • Bonds
  • Stocks
  • Mutual Funds
  • Life Insurance
  • Rent
• Mutual Funds


  A company that pools money from many investors and invests the money in securities such as stocks, bonds, and short-term debt
• Life Insurance


  A contract between an insurance policy holder and an insurance company, where the insurer promises to pay a sum of money in exchange for a premium, upon the death of an insured person or after a set period
• Rent


  A payment of a factor of production in excess of its opportunity cost
• Types of Rent

  • Inframarginal Rent
  • Pure Economic Rent
  • Quasi Rent
  • Monopoly Rent
• Unemployment


  A situation where a person actively searches for employment but is unable to find work
• Types of Unemployment

  • Fictional Unemployment
  • Cyclical Unemployment
  • Structural Unemployment
• Direct Investment:

  • Business Investment
  • Real Estate
• Business Investments:

  Spending by private businesses and nonprofits on physical capital long lasting assets used to produce goods and services.

  Buying small business
• Savings Account:

  Interest-bearing deposit account held at a bank or other financial institution
• Bonds:

  • Used by government or companies to raise money by borrowing from investors
  • Government securities and corporate bonds
• Stocks:

  Type of security that gives stockholders a share of ownership in a company