Question

Write short notes on the following:

1. Qualities of an entrepreneur

2. Types of capital

Answer 1

1) The following are some of the qualities of an entrepreneur:

i. An entrepreneur should be efficient.
ii. He/she should be organised.
iii. He/she should have good leadership qualities.
iv. An entrepreneur should be bold and courageous.
v. He/she should have vision and foresight.

2) Capital can be classified into the following categories:

i. On the basis of ownership:

a. Private capital - It is owned by private individuals or institutes.
b. Public capital - It is owned by the government or a society.

ii. On the basis of mobility:

a. Sunk capital - It is the capital which is used only for a specific purpose. For instance, washing machines, which are used only for the specific purpose of washing clothes.
b. Floating capital - It is the capital which is used for a variety of purposes. For example - electricity.

iii. On the basis of nature:

a. Real capital - It is the capital which is used in the production of other goods. For example, capital assets like buildings, machinery, raw materials etc.
b. Money capital - It is the capital which is in the form of money. This capital is used to purchase real capital.

iv. On the basis of durability:

a. Fixed capital - It refers to the capital which is used in the process of production repeatedly.
b. Working capital - It refers to the capital which is used in the process of production only once.