Question

State any two differences between an entrepreneur and other factors of production.

State one difference between an entrepreneur and other factors of production.

Answer 1

Entrepreneurs and other factors of production:

1. An entrepreneur is a person who carries the risk of business and coordinates the activities of all the other factors of production.
2. An entrepreneur earns a profit with his innovative ideas, efficiencies and willingness to take risks. Hence, an entrepreneur is the only factor of production which earns a profit.

Answer 2

	Entrepreneur	Other Factors of Production
(1)	An entrepreneur carries the risk of business.	All other factors of production have nothing to do with the risk of business.
(2)	The income of an entrepreneur is residual in nature.	Incomes from all other factors are contractual.
(3)	An entrepreneur brings other factors together, viz. land, labour and capital.	Land, labour and capital are scattered at different places.