Question

A. In this chapter, you learned about the types of firms but what talents would you expect to find in successful entrepreneurs? How would college education benefit an entrepreneur? In what areas of entrepreneurial activity does a college education cease to be much of a value? B. The first sushi restaurant opens in town. Initially, people are very cautious about eating tiny portions of raw fish, as this is a town where large portions of grilled meat have always been popular. Soon, however, an influential health report warns consumers against grilled meat and suggests that they increase their consumption of fish, especially raw fish. The sushi restaurant becomes very popular and its profitability increases. What will happen to the number of sushi restaurants in town in the long run? Will the first sushi restaurant be able to sustain its short-run profit over the long run? What will happen to the number of steakhouses in town in the long run? Explain your answers. C. Explain why an economist and a zoologist, looking at horses, cows, and automobiles, would not choose the same two out of three as having something in common?

Answer 1

1. An entrepreneur is an individual who is ready to take the risk of operating a company with innovative and creative ideas. A successful entrepreneur has the talent to be self-confident and can make positive decisions for their company. College education has various benefits for an entrepreneur as it helps to improve the confidence level and also provide information about the current scenario. There are numerous extra-curricular activities provided by the colleges that improve the skills of an individual, and this area has much of a value in the decision of an entrepreneur.
2. It is given that an influential health report warns the consumers to not eat grilled meat and suggests increasing the consumption of fish, which results in increasing the demand of raw fish and increased the profitability of sushi restaurant. In the long-run, the number of sushi restaurant increases as the increased profitability in this industry attracts, more firms to enter the market that results in an increase in the number of sushi restaurant.

The first sushi restaurant has a first-mover advantage in the market due to which he can charge a little higher price than other restaurants in the market. But, the restaurant is unable to sustain the short-run profit due to high competition as more number of firms will affect the consumer’s preferences.

Steakhouses are the place to meat-lovers, and due to the health report, people start reducing the consumption of grilled meat that reduces the revenue of the steakhouses. Therefore, firms discourage to enter the market and that, in turn, reduces the number of steakhouses in the long-run.

1. An economist is a person who studies the different behavior of the market, whereas a zoologist is a person who studies the different species of the animals.

An economist will prefer cows and automobiles as they are the two different sectors of an economy and provide a variety of products to the people of a nation. In contrast, zoologist will prefer horses and cows as they both are the different species and helps to understand the differences in the animals. Economist and zoologist would not choose the same two as they have different studies and has different ways to analyzing the characteristics of all the three as a cow for an economist is something that gives milk while cow for a zoologist is an animal that has different characteristics than other animals.