Unit notes and practice questions
Everything here is for unit 8 of the Grade 10 Economics textbook: what the chapter covers, the short notes, practice questions with their answers, and the lesson video where one exists.
The cards filed under this chapter on the Grade 10 Economics page. Open one at a time.
When you use it
Use to calculate economic feasibility during cost benefit analysis where a ratio greater than 1 indicates a viable decision.
Watch out
Ensure both benefits and costs include all tangible, intangible, and opportunity values before computing the ratio.
Drafted from Grade 10 Economics, page 161 onwards, then checked twice before it went up
| Document | Main Focus | Timing | Relative Cost |
|---|---|---|---|
| Feasibility Study | Tests viability and proof of concept | Before committing to a business plan | Less than 20% of business plan cost |
| Business Plan | Detailed operational roadmap and execution | After project is proven feasible | Higher depth and cost |
When you use it
Use to distinguish the preliminary validation of a business idea from the detailed execution plan.
Watch out
Never commission a business plan before completing a feasibility study first, as the feasibility study proves whether the idea is worth pursuing.
Drafted from Grade 10 Economics, page 161 onwards, then checked twice before it went up
| Form | Ownership | Liability | Legal Entity |
|---|---|---|---|
| Sole Proprietorship | 1 individual | Unlimited | No separate entity |
| Partnership | 2 to 20 persons (10 for banking) | Unlimited (General) | No separate entity |
| Corporation | Shareholders | Limited | Separate legal personality |
When you use it
Use when comparing legal structures, ownership limits, and personal liability across business organizations.
Watch out
In a sole proprietorship and general partnership, liability is unlimited, meaning personal property can be seized to pay business debts.
Drafted from Grade 10 Economics, page 161 onwards, then checked twice before it went up
When you use it
Use when answering questions contrasting startups against traditional small businesses.
Watch out
Do not assume startups generate quick profits in the short run. Startups prioritize top end revenue, rapid growth, and market share, and may take years to record their first profit.
Drafted from Grade 10 Economics, page 161 onwards, then checked twice before it went up
| Innovation Type | Core Focus |
|---|---|
| Product Innovation | New or improved goods or services |
| Process Innovation | New production, delivery, or operational methods |
| Marketing Innovation | Changes in product design, packaging, pricing, or promotion |
| Organizational Innovation | New business practices, workplace setup, or external relations |
| Eco-Innovation | Reducing environmental impacts and meeting sustainability goals |
When you use it
Use when identifying or classifying business innovations based on the Oslo Manual categories.
Watch out
Routine seasonal changes, regular updates, or minor bug fixes do not qualify as product innovations.
Drafted from Grade 10 Economics, page 161 onwards, then checked twice before it went up
10 multiple-choice questions written against this chapter, each with its answer and the reason. Try one before you open the answer.
Question 1
According to the textbook, innovation can be summarized into which two key elements?
Answer: A Creativity and implementation
Why
The textbook states that innovation is something new or improved that creates value, summarized into two key elements: creativity and implementation.
Question 2
What is the maximum number of partners allowed by law in a non-banking partnership business?
Answer: C 20
Why
In a partnership, at least two persons are required. The maximum limit is 10 for a banking business and 20 for other general businesses.
Question 3
What is the main focus of a business startup compared to a traditional small business?
Answer: C Rapid growth and maximizing top-end revenue
Why
Startups focus primarily on rapid growth, large market share, and top-end revenue, whereas small businesses are content operating within a small portion of a market.
Question 4
In standard Cost Benefit Analysis (CBA), what is the basic formula used to calculate the benefit-cost ratio?
Answer: A Benefit divided by cost (b/c)
Why
The standard formula for Cost Benefit Analysis is the benefit/cost ratio, simplified as benefit divided by cost (b/c).
Question 5
A software firm in Addis Ababa reorganizes its business practices by introducing a 4-day work week and allowing staff to work from home. What type of innovation is this?
Answer: B Organizational innovation
Why
Organizational innovation involves developing a new organizational strategy that changes company business practices and how the workplace is organized, such as adopting a 4-day work week or remote work.
Question 6
What does unlimited liability mean for a sole proprietor running a business in Bahir Dar?
Answer: D The owner's personal property can be used to settle unpaid business debts
Why
Unlimited liability means that if business assets are insufficient to cover business debts, the owner's personal assets and property can be taken to pay the creditors.
Question 7
According to the textbook list of famous innovators, who invented the vacuum method of canning?
Answer: B Amanda Jones
Why
The textbook specifically lists Amanda Jones as the inventor of the vacuum method of canning.
Question 8
When angel investors provide seed funding to a new startup, what share of the business ownership do they typically receive in return?
Answer: A 5 to 10 percent
Why
According to the textbook, angel investors who provide seed money to startups usually get a 5 to 10 percent share of the business.
Question 9
Which of the following correctly describes the relationship between a feasibility study and a business plan?
Answer: C A feasibility study tests if an idea is viable and normally costs less than 20% of a business plan
Why
A feasibility study tests whether a business idea is workable before major financial commitments are made, and it typically costs less than 20% of the cost of a full business plan.
Question 10
According to Joseph Schumpeter (1934), why is creative destruction necessary for economic development?
Answer: C New ideas replace outdated models and create new industries that improve quality of life
Why
Schumpeter argued that capitalism develops through creative destruction, where innovative products and processes take over old paradigms, making obsolete models disappear to make way for better solutions.
The app holds 12 questions on this unit, marked as you go. These are the first 10.
Unit 8 runs from page 161 to page 186 of the Ministry of Education edition.
Ministry of Education edition, English, 193 pages
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