ACTIVITY #1: CHAPTER 1: INTRODUCTION TO

ENTREPRENEURSHIP

DISCUSSION QUESTIONS:

1. Explain entrepreneurship according to Frank Knight.

According to Knight, profit—earned by the entrepreneur who makes

decisions in an uncertain environment is the entrepreneur's reward for
bearing insurable risk. Knight also produced a monograph entitled The
Economic Organization, which became a classic exposition of
microeconomic theory.
2. Differentiate high level kind of entrepreneurship from low level kind of
entrepreneurship.
Small businesses usually deal with known and established
products and services, while entrepreneurial ventures focus on
new, innovative offerings. Because of this, small business owners
tend to deal with known risks and entrepreneurs face unknown
risks.
3. Explain entrepreneurship according to Hayek and Kirzner.
Kirzner's theory of entrepreneurial discovery builds directly on Hayek's
notion of an economy characterized by dispersed, tacit knowledge, an
economy in which “competition” is a process of coordination and
equilibration, rather than a set of conditions (as in Walrasian competitive
general equilibrium).