Entrepreneurship & risk
Edexcel GCSE Business Studies revision on Entrepreneurship & risk. Aligned to the Pearson Edexcel GCSE Business 1BS0 specification. This bank has 10 practice questions on this topic.
Sample questions (3 of 10)
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Question 1
Which of the following is a primary characteristic of an entrepreneur?
- A) Aversion to risk
- B) Willingness to take financial risks
- C) Preference for routine tasks
- D) Desire for job security
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Answer: Willingness to take financial risks
An entrepreneur is defined by their willingness to take risks in the hope of making a profit. Unlike employees who seek stability, entrepreneurs accept the possibility of financial loss as part of the business creation process.
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Question 2
Identify the term used to describe the possibility of a business failing to meet its financial obligations.
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Answer: Financial risk
This is a core concept in business, as entrepreneurs invest personal savings or loans into a startup. If the business does not generate enough revenue to cover costs, the entrepreneur faces the risk of bankruptcy or personal financial loss.
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Question 3
What is meant by the term opportunity cost in the context of entrepreneurship?
- A) The total cost of starting a business
- B) The profit made in the first year
- C) The benefit lost from the next best alternative
- D) The tax paid on business earnings
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Answer: The benefit lost from the next best alternative
When an entrepreneur decides to start a business, they may give up a steady salary or time spent on other projects. The opportunity cost is the value of the best alternative option that was not chosen.
Want to test yourself on the remaining cards for this topic?
7 more questions on Entrepreneurship & risk — plus mistakes tracking and spaced repetition across the whole Business Studies spec.