What term describes the willingness and ability to take the risk of starting and managing a business?

• A. Capital
• B. Entrepreneurship
• C. Productivity
• D. Opportunity Cost

Answer: (B)

Entrepreneurship describes the willingness and ability to take the risk of starting and managing a business. It involves spotting a potential opportunity, gathering and directing resources (like labor, capital, and land), and bearing the uncertainty that comes with trying to turn that opportunity into a profitable venture. This role is about initiative and risk-taking to create new products, services, or processes, which is what drives innovation and economic growth.

Think of capital as the funds and physical assets used in production, productivity as the efficiency with which inputs are turned into outputs, and opportunity cost as the value of what you give up when choosing one option over another. None of these encapsulates the active risk-bearing and initiative required to launch and run a business the way entrepreneurship does.