Unit notes and practice questions
Everything here is for unit 8 of the Grade 9 Economics textbook: what the chapter covers, the short notes, practice questions with their answers, and the lesson video where one exists.
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A short video lesson on this chapter, made by Temari. It loads only when you press play.
What an entrepreneur really does · 4 min · 2 past exam questions worked through
Tap a part to play the lesson from there.
The cards filed under this chapter on the Grade 9 Economics page. Open one at a time.
When you use it
Use to explain the progression from idea generation to commercial business activity.
Watch out
Creativity is the ability to generate new ideas, innovation is applying those ideas to solve problems, and entrepreneurship is the commercial process of taking risks to launch the enterprise.
Drafted from Grade 9 Economics, page 105 onwards, then checked twice before it went up
| Capital Type | Term | Primary Purpose |
|---|---|---|
| Permanent Capital | Long term | Start-up costs, major developments, and expansions |
| Working Capital | Short term | Raw materials, operating costs, and short-lived assets |
| Asset Finance | Medium to long term | Purchase of physical assets like machinery and buildings |
When you use it
Use to differentiate between the capital needs of a new or growing business.
Watch out
Working capital is short term financing for day to day operations, not for purchasing permanent machinery.
Drafted from Grade 9 Economics, page 105 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
Which type of innovation is defined as the creation of an entirely new product, service, or process?
Answer: A Invention
Why
Invention is defined as the creation of a new product, service, or process. Duplication is replication, expansion is growth, and synthesis is combining existing concepts.
Question 2
According to the textbook, where should an entrepreneur first look to obtain start-up capital?
Answer: B Personal savings
Why
In the first place, entrepreneurs should pay for start-up money from their own pockets using their personal savings.
Question 3
Which people management skill is defined as the ability to express ideas and inform others orally and in writing?
Answer: C Communication skills
Why
Communication skills refer to the ability to express ideas and inform others both orally and in written form.
Question 4
In the 18th century, which thinker developed the first theory of an entrepreneur as a risk-taker?
Answer: B Richard Cantillon
Why
In the 18th century, the first theory of an entrepreneur was developed by Richard Cantillon, who stated that an entrepreneur is a risk-taker.
Question 5
Almaz buys teff and cooking oil every week to operate her restaurant in Hawassa. What type of financing does she need to cover these recurring, short-term operational expenses?
Answer: B Working capital
Why
Working capital is short-term financing needed by firms to pay for day-to-day expenses such as raw materials and ongoing operational costs.
Question 6
What type of innovation involves combining existing concepts and factors into a new formulation?
Answer: C Synthesis
Why
Synthesis is the combination of existing concepts and factors into a new formulation.
Question 7
According to the textbook, diverse teams with members from different backgrounds can perform better than non-diverse teams by up to what percentage?
Answer: C 35 percent
Why
Studies mentioned in the textbook show that teams with members from diverse backgrounds are more creative and perform better by up to 35 percent compared to non-diverse teams.
Question 8
What term did Joseph Schumpeter use to describe the entrepreneurial force that creates economic growth while making older businesses and outdated products obsolete?
Answer: B Creative destruction
Why
Joseph Schumpeter called this force creative destruction, where innovation creates new growth while disrupting or destroying established businesses and products.
Question 9
Dawit operates a small workshop in Addis Ababa. He tracks his weekly expenses, monitors cash flow, and calculates financial risk before investing in equipment. Which general management skill is Dawit applying?
Answer: C Financial skills
Why
Financial skills refer to the ability to manage money, keep track of expenses, monitor cash flow, and evaluate investments based on their risk.
Question 10
Joseph Schumpeter identified several methods for finding opportunities. Which of the following is specifically classified as a demand opportunity?
Answer: A Developing a new market for an existing product
Why
Developing a new market for an existing product is classified as a demand opportunity, whereas finding new low-cost resources is a supply opportunity, and the technological methods are innovation approaches.
The app holds 12 questions on this unit, marked as you go. These are the first 10.
The whole Grade 9 Economics textbook, free as a PDF.
Ministry of Education edition, English, 130 pages
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