Question

Entrepreneurial ability is a special kind of labour that ___________.

• A. is hired out to firms at high wages
• B. organises the process of production
• C. produces new capital goods to earn interest
• D. manages to avoid losses by continual innovation

Answer 1

The correct option is B organises the process of production

There are two types of physical capital: fixed capital and working capital. The above points clearly show that every production is organized by combining land, labour, physical capital and human capital. Without these factors of production, production of goods and services is not possible. Hence organized production is one best enterprenuer’s ability.