ECON 2720 Study Guide - Final Guide: Spot Contract, Medici Bank, Creative Destruction

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brownprairie-dog495

9 Apr 2015

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12:07 pm (1) explain what joseph schumpeter meant by creative destruction . Creative destruction is the process where new and better goods are invented, so older goods become obsolete and unused. An example of creative destruction is apple coming into the smart phone market, and because consumers like its product better blackberry is pretty much eliminated from the market (2) explain what william baumol meant by productive and unproductive entrepreneurship. Productive entrepreneurship refers to people who invent goods or provide services and sell them for a good price. Unproductive entrepreneurship refer to people who try and enter the market by trying to change the rules and influence governments (3) discuss the economics of the transition from the bronze age to the iron age. The bronze age ended because supplies of bronze decreased greatly, so the price began to increase greatly. Actual iron was very scarce, but iron ore was available, but it was difficult to smelt.

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Chapters 1-3: Select a question from the list below. Cite the question number (please refrain from restating the question, as we already know what it is), then give a good answer. Explain your reasoning or provide examples. If you answer the same as a prior respondent, give a unique rationale. Use original wording. Avoid copying any material from other sources in lieu of a unique answer, as that effort merely demonstrates that you know how to copy information. (Instead, we need evidence of thought.) The minimum length is a measly 125 words, which is probably attainable almost by accident, so try not to sneeze as you write.

No replies are necessary in concept challenges, but feel free to reply to others anyway, as often as you like.

1. Joseph Schumpeter described entrepreneurship as creative destruction. People have argued about what this means. Some people think it means that the entrepreneurial process is dangerous. What do you think Schumpeter actually meant by this?

2. Richard Cantillon coined the term entrepreneur in 1755. It means âone who undertakes [something].â How is this an apt description of the entrepreneurial function? Why do you suppose he chose âundertake,â rather than some other word?

3. Note how closely in time entrepreneurship and free-market economics (Adam Smith, 1776) emerged as concepts. Indeed, both Cantillon and Smith were economists (before there even were economists). What does this say about entrepreneurship?

4. How is the entrepreneur an inventor? How is the entrepreneur more than an inventor? What does an inventor need to become an entrepreneur? What kinds of innovations can an entrepreneur contrive, which simply never occur to an inventor?

5. Gifford and Elizabeth Pinchot coined the term intrapreneurship in 1978 to describe a person with entrepreneurial talent who was content to work for someone else. What quality does an entrepreneur have, which an intrapreneur is lacking?

ECON 2720 Study Guide - Final Guide: Spot Contract, Medici Bank, Creative Destruction

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