Question

Darnell lives in an area where labor is plentiful and locations for start-ups are relatively cheap. He is also confident that he can find start-up funds for a graphic arts business. As he evaluates the opportunity for his proposed venture, which two other factors of production does he need to succeed?A) Labor and knowledgeB) Entrepreneurship and knowledgeC) Entrepreneurship and capitalD) Capital and land

Answer 1

Answer:

B) Entrepreneurship and knowledge

Explanation:

For Darnell, labor is readily available.  The many locations where he can set up his business represents land.  He is sure to get start-up funds, which is capital.  Out of the four factors of production, he now needs entrepreneurship skills and knowledge.

Entrepreneurship is the art of creating a new business and managing it to profitability.  It involves taking risks associated with pursuing a business opportunity. Darnell is the entrepreneur in this case. He has to coordinate all the other factors of production and make them work as a unit. He needs the knowledge to start and manage the business to make it successful.