16. Read Text c and explain why entrepreneurship is considered one of the factors of production by many economists.
Text С
The Entrepreneur
As
mentioned earlier, economists sometimes identify a forth factor of
production — enterprise. It is held that, left to themselves, land,
labour, and capital will not produce anything. There must be some
person or persons, who will organize these three factors so that
production take place. Someone must take the decisions (a) what to
produce (i.e. the type of good or service and the quantity), (b) how
to produce (i.e. the methods of production); (c) where to produce
(i.e. the location of the enterprise).
Whoever
takes the decisions, and the consequent risks, is known as the
entrepreneur.
There is no really suitable English word to describe such a person,
perhaps 'enterpriser' is the nearest we can get. The
entrepreneur is the person who undertakes production with a view to
profit. In a capitalist society, production would not take place
unless someone was prepared to buy and organize economic
resources for production on the basis of expected profit.
Organisation, management and
risk-bearing — these are the entrepreneurial functions. In the
one-person business, they are clearly all carried out by the
sole proprietor. In the large company, the functions of the
entrepreneur are shared, risk bearing is the role of the
shareholders; management is the function of the directors.
