Practice question · Estimate
A founder invests 50k€. With probability 0.5 the venture returns 130k€; otherwise 0€. Set the slider to the expected net gain in k€.
Estimate on a scale from -50k€ (-50) to +80k€ (80).
Hints
- Expected revenue: k€.
- Subtract the 50k€ committed up front.
Show the answer
15 (answers within ±4 count)
Why
Expected net gain k€. A thin expected margin on a coin flip, the everyday arithmetic of Knightian judgment.
Practise The Entrepreneur
The app has 5 more questions on this lesson, and keeps your place in the course. Business I is free to start.
More questions on The Entrepreneur
- Which of the following count as Schumpeterian “new combinations”?
- Order the entrepreneurial process from first step to last.
- Match each theorist to their view of the entrepreneur.
- Knight separated risk from uncertainty. Why does that distinction explain where entrepreneurial profit comes…
- By Knight’s distinction, which situation involves _uncertainty_ rather than _risk_?
- Knight says the entrepreneur bears uncertainty, Schumpeter says they destroy the old order, Kirzner says they…
- Sort each activity: Schumpeterian innovation or Kirznerian arbitrage?
- According to Knight, entrepreneurs can insure away the uncertainty of whether their product will succeed.