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Entrepreneurship - UPSC Prelims Level MCQs

What is the primary characteristic of an entrepreneur? a) Risk Aversion b) Dependence on Government Grants c) Innovation and Risk-taking d) Preferring
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UPSC Prelims Level MCQs on Entrepreneurship

General Questions on Entrepreneurship

  1. What is the primary characteristic of an entrepreneur?
    a) Risk Aversion
    b) Dependence on Government Grants
    c) Innovation and Risk-taking
    d) Preferring Job Security

    Answer: c) Innovation and Risk-taking

  2. Which of the following best defines entrepreneurship?
    a) Owning a business without taking risks
    b) The process of designing, launching, and running a new business
    c) Working in a corporate job
    d) None of the above

    Answer: b) The process of designing, launching, and running a new business

  3. Which of the following is NOT a function of an entrepreneur?
    a) Innovation
    b) Risk-taking
    c) Routine administrative tasks
    d) Resource allocation

    Answer: c) Routine administrative tasks

  4. Which famous economist defined an entrepreneur as a person who shifts economic resources from an area of lower productivity to an area of higher productivity?
    a) Adam Smith
    b) Joseph Schumpeter
    c) David Ricardo
    d) Jean-Baptiste Say

    Answer: d) Jean-Baptiste Say

Entrepreneurship as a Career

  1. Which of the following is a major challenge faced by first-time entrepreneurs?
    a) Easy access to capital
    b) No requirement for risk management
    c) High failure rates and financial uncertainty
    d) Guaranteed success within a year

    Answer: c) High failure rates and financial uncertainty

  2. Startups and entrepreneurship contribute to which of the following?

    1. Job Creation
    2. Innovation
    3. GDP Growth
    4. Market Monopoly

    Select the correct answer:
    a) 1 and 2 only
    b) 2 and 3 only
    c) 1, 2, and 3 only
    d) All of the above

    Answer: c) 1, 2, and 3 only

Entrepreneurs’ Profile & Motivation

  1. Which of the following entrepreneurs is associated with Tesla and SpaceX?
    a) Jeff Bezos
    b) Ratan Tata
    c) Elon Musk
    d) Warren Buffett

    Answer: c) Elon Musk

  2. Which of the following is NOT a key motivation for entrepreneurs?
    a) Desire for Independence
    b) Passion for Solving Problems
    c) Avoiding Responsibility
    d) Financial Gain

    Answer: c) Avoiding Responsibility

Making of an Entrepreneur

  1. Emotional Intelligence (EI) is essential for an entrepreneur because it helps in:
    a) Controlling business finances
    b) Managing relationships and making informed decisions
    c) Avoiding all risks in business
    d) Reducing competition

    Answer: b) Managing relationships and making informed decisions

  2. Which of the following traits are common in successful entrepreneurs?

    1. High risk-taking ability
    2. Lack of leadership skills
    3. Strong goal-setting mindset
    4. Poor adaptability

Select the correct answer:
a) 1 and 3 only
b) 2 and 4 only
c) 1, 2, and 3 only
d) All of the above

Answer: a) 1 and 3 only

Creative and Design Thinking

  1. Which of the following best describes ‘Design Thinking’ in entrepreneurship?
    a) A process focused on creating aesthetic products only
    b) A structured approach to problem-solving with a focus on human needs
    c) A financial strategy for startups
    d) A legal framework for intellectual property

Answer: b) A structured approach to problem-solving with a focus on human needs

Entrepreneurial Decision Process

  1. Which is the first step in the entrepreneurial decision-making process?
    a) Scaling the business
    b) Identifying an opportunity
    c) Hiring employees
    d) Raising capital

Answer: b) Identifying an opportunity

Role Models, Mentors, and Support System

  1. Which Indian government initiative supports entrepreneurship and startups?
    a) MGNREGA
    b) Make in India
    c) Swachh Bharat Abhiyan
    d) GST Implementation

Answer: b) Make in India

  1. Which of the following schemes is focused on women entrepreneurs in India?
    a) Stand-Up India
    b) Digital India
    c) Smart Cities Mission
    d) Beti Bachao Beti Padhao

Answer: a) Stand-Up India

Current Affairs-Based Questions on Entrepreneurship (2024-25)

  1. Which Indian startup recently became a unicorn in 2024, focusing on AI-driven solutions?
    (Note: This would require an updated answer based on recent startups.)

Answer: [Krutrim AI]

  1. The government of India launched the ‘Startup India Seed Fund Scheme’ (SISFS) to:
    a) Support MSMEs only
    b) Provide seed funding to early-stage startups
    c) Develop corporate entrepreneurship
    d) Encourage traditional businesses

Answer: b) Provide seed funding to early-stage startups

  1. Which global entrepreneur was recently in news for launching a new AI company to rival OpenAI?

Answer: [Elon Musk]

  1. Which city topped the Global Startup Ecosystem Index 2024 as the best startup hub?
    (Note: The answer will vary based on the latest index rankings.)

Answer: [San Francisco]

  1. Which Indian entrepreneur received the ‘EY Entrepreneur of the Year 2024’ award?
    (To be updated based on the latest award announcement.)

Answer: [Nithin Kamath, Founder and Chief Executive Officer, Zerodha, ]

Here are some statement-based multiple-choice questions (MCQs) on Entrepreneurship in UPSC Prelims style. These include general questions as well as current affairs-based ones.

Statement-Based Questions on Entrepreneurship

General Entrepreneurship Concepts

  1. Consider the following statements regarding entrepreneurship:

    1. Entrepreneurs always work alone and do not require a team.
    2. Entrepreneurs contribute to economic growth by creating jobs.
    3. Risk-taking is an essential component of entrepreneurship.

    Which of the statements given above is/are correct?
    a) 1 and 2 only
    b) 2 and 3 only
    c) 1 and 3 only
    d) 1, 2, and 3

    Answer: b) 2 and 3 only

  2. Consider the following statements about a startup:

    1. It must be registered under the Companies Act, 2013.
    2. It should be less than 10 years old from the date of incorporation.
    3. Its annual turnover must not exceed ₹100 crore to qualify as a startup under the Startup India scheme.

    Which of the statements given above is/are correct?
    a) 1 and 2 only
    b) 2 and 3 only
    c) 1 and 3 only
    d) 1, 2, and 3

    Answer: d) 1, 2, and 3

  3. Consider the following statements regarding ‘Entrepreneurial Motivation’:

    1. Intrinsic motivation refers to external rewards such as money and status.
    2. Extrinsic motivation is primarily driven by personal satisfaction and passion for work.
    3. A successful entrepreneur requires both intrinsic and extrinsic motivation.

    Which of the statements given above is/are correct?
    a) 1 and 2 only
    b) 2 and 3 only
    c) 3 only
    d) 1, 2, and 3

    Answer: c) 3 only

Entrepreneurial Decision Process & Leadership

  1. Consider the following statements about decision-making in entrepreneurship:

    1. Decision-making in entrepreneurship is always quick and based purely on instinct.
    2. Entrepreneurs must analyze risks and opportunities before making decisions.
    3. Data-driven decision-making can reduce the chances of business failure.

    Which of the statements given above is/are correct?
    a) 1 and 2 only
    b) 2 and 3 only
    c) 1 and 3 only
    d) 1, 2, and 3

    Answer: b) 2 and 3 only

  2. Consider the following statements about emotional intelligence (EI) in entrepreneurship:

    1. Emotional intelligence helps entrepreneurs manage stress and uncertainty.
    2. Entrepreneurs with high EI can build better relationships with employees and customers.
    3. EI is entirely based on genetic factors and cannot be improved.

    Which of the statements given above is/are correct?
    a) 1 and 2 only
    b) 2 and 3 only
    c) 1 and 3 only
    d) 1, 2, and 3

    Answer: a) 1 and 2 only

Current Affairs-Based Questions on Entrepreneurship (2024-25)

  1. Consider the following statements regarding the ‘Startup India’ initiative:

    1. It provides tax benefits to eligible startups for the first seven years.
    2. The initiative includes the Fund of Funds for Startups (FFS) managed by SIDBI.
    3. Only technology-based startups are eligible under the scheme.

    Which of the statements given above is/are correct?
    a) 1 and 2 only
    b) 2 and 3 only
    c) 1 and 3 only
    d) 1, 2, and 3

    Answer: a) 1 and 2 only

  2. Consider the following statements regarding the ‘Atal Innovation Mission (AIM)’:

    1. It is an initiative under NITI Aayog.
    2. It aims to promote a culture of innovation and entrepreneurship in schools and universities.
    3. AIM provides direct financial assistance to startups and businesses.

    Which of the statements given above is/are correct?
    a) 1 and 2 only
    b) 2 and 3 only
    c) 1 and 3 only
    d) 1, 2, and 3

    Answer: a) 1 and 2 only

  3. Consider the following statements regarding the ‘Stand-Up India’ scheme:

    1. It is aimed at promoting entrepreneurship among Scheduled Castes, Scheduled Tribes, and women entrepreneurs.
    2. It provides loans ranging from ₹10 lakh to ₹1 crore to eligible beneficiaries.
    3. The scheme is implemented by the Ministry of Commerce and Industry.

    Which of the statements given above is/are correct?
    a) 1 and 2 only
    b) 2 and 3 only
    c) 1 and 3 only
    d) 1, 2, and 3

    Answer: a) 1 and 2 only

  4. Consider the following statements regarding India’s startup ecosystem in 2024:

    1. India is among the top five countries in the world in terms of the number of startups.
    2. The highest number of unicorn startups in India belong to the fintech sector.
    3. Bengaluru has been ranked the best startup hub in India.

    Which of the statements given above is/are correct?
    a) 1 and 2 only
    b) 2 and 3 only
    c) 1 and 3 only
    d) 1, 2, and 3

    Answer: d) 1, 2, and 3

  5. Consider the following statements regarding the ‘Digital India Startup Hub’:

  • It is an initiative under the Ministry of Electronics and Information Technology (MeitY).

  • It aims to promote digital entrepreneurship and innovation across India.

  • Only private corporations are allowed to participate in the program.

Which of the statements given above is/are correct?
a) 1 and 2 only
b) 2 and 3 only
c) 1 and 3 only
d) 1, 2, and 3

Answer: a) 1 and 2 only

Statement-based MCQs 

UNIT-2: ENTREPRENEURSHIP

2.1 What is Entrepreneurship and Who is an Entrepreneur?

  1. Consider the following statements about Entrepreneurship:

    1. Entrepreneurship is primarily focused on profit-making and does not involve risk.
    2. Entrepreneurs play a crucial role in economic development by generating employment.
    3. The government cannot be involved in entrepreneurship.

    Which of the statements given above is/are correct?
    a) 1 and 2 only
    b) 2 only
    c) 1 and 3 only
    d) 1, 2, and 3

    Answer: b) 2 only

  2. Consider the following statements about an Entrepreneur:

    1. Entrepreneurs are innovators who introduce new ideas, products, or services.
    2. All entrepreneurs must have a business degree to be successful.
    3. Entrepreneurs take risks to start and manage businesses.

    Which of the statements given above is/are correct?
    a) 1 and 2 only
    b) 1 and 3 only
    c) 2 and 3 only
    d) 1, 2, and 3

    Answer: b) 1 and 3 only

2.2 Entrepreneurship as a Career

  1. Consider the following statements regarding Entrepreneurship as a career:

    1. Self-employment and entrepreneurship are the same concepts.
    2. Government schemes like ‘Startup India’ promote entrepreneurship in India.
    3. Entrepreneurship provides flexibility and independence in decision-making.

    Which of the statements given above is/are correct?
    a) 1 and 2 only
    b) 2 and 3 only
    c) 1 and 3 only
    d) 1, 2, and 3

    Answer: b) 2 and 3 only

  2. Consider the following government initiatives promoting entrepreneurship in India:

    1. MUDRA Yojana
    2. Stand-Up India Scheme
    3. Atal Innovation Mission (AIM)

    Which of the above are correctly matched with entrepreneurship promotion?
    a) 1 and 2 only
    b) 2 and 3 only
    c) 1, 2, and 3
    d) None

    Answer: c) 1, 2, and 3

2.3 Entrepreneurs' Profile

  1. Consider the following statements about successful entrepreneurs:

    1. They possess leadership and risk-taking abilities.
    2. All successful entrepreneurs come from business backgrounds.
    3. They often identify market gaps and create innovative solutions.

    Which of the statements given above is/are correct?
    a) 1 and 2 only
    b) 1 and 3 only
    c) 2 and 3 only
    d) 1, 2, and 3

    Answer: b) 1 and 3 only

2.4 Entrepreneurial Motivation

  1. Consider the following statements regarding Entrepreneurial Motivation:

    1. Intrinsic motivation is driven by internal desires such as passion and satisfaction.
    2. Extrinsic motivation includes external rewards like money and recognition.
    3. An entrepreneur requires both intrinsic and extrinsic motivation for success.

    Which of the statements given above is/are correct?
    a) 1 and 2 only
    b) 2 and 3 only
    c) 1, 2, and 3
    d) 1 and 3 only

    Answer: c) 1, 2, and 3

2.5 Making of an Entrepreneur

  1. Consider the following skills essential for entrepreneurs:

    1. Risk-taking ability
    2. Emotional Intelligence
    3. Goal-setting skills

    Which of the above skills are important for entrepreneurial success?
    a) 1 and 2 only
    b) 2 and 3 only
    c) 1 and 3 only
    d) 1, 2, and 3

    Answer: d) 1, 2, and 3

  2. Consider the following statements about Emotional Intelligence (EI) and Entrepreneurship:

    1. High EI helps entrepreneurs handle stress and build strong relationships.
    2. Entrepreneurs with high EI can better manage teams and conflicts.
    3. EI is entirely a genetic trait and cannot be developed.

    Which of the statements given above is/are correct?
    a) 1 and 2 only
    b) 2 and 3 only
    c) 1 and 3 only
    d) 1, 2, and 3

    Answer: a) 1 and 2 only

2.6 Creative and Design Thinking

  1. Consider the following statements about Creative Thinking in Entrepreneurship:

    1. It helps entrepreneurs find innovative solutions to business problems.
    2. Creativity is only needed in artistic fields and not in business.
    3. Design Thinking focuses on user-centric problem-solving.

    Which of the statements given above is/are correct?
    a) 1 and 3 only
    b) 2 and 3 only
    c) 1 and 2 only
    d) 1, 2, and 3

    Answer: a) 1 and 3 only

2.7 The Entrepreneurial Decision Process

  1. Consider the following factors influencing the Entrepreneurial Decision Process:
    1. Market demand
    2. Availability of funding
    3. Government policies

Which of the factors given above affect entrepreneurial decision-making?
a) 1 and 2 only
b) 2 and 3 only
c) 1, 2, and 3
d) None of the above

Answer: c) 1, 2, and 3

2.8 Role Models, Mentors, and Support System

Consider the following statements about the role of mentors and support systems in entrepreneurship:
    1. A mentor provides guidance and shares industry insights with entrepreneurs.
    2. Having a strong support system improves the chances of startup success.
    3. Entrepreneurs should not take advice from others and must make all decisions independently.

Which of the statements given above is/are correct?
a) 1 and 2 only
b) 2 and 3 only
c) 1 and 3 only
d) 1, 2, and 3

Answer: a) 1 and 2 only

Current Affairs-Based Questions

Consider the following statements regarding India's startup ecosystem in 2024:
    1. India ranks among the top three countries in the world in terms of the number of startups.
    2. The highest number of Indian unicorn startups belong to the fintech sector.
    3. Bengaluru has been ranked as India’s top startup hub in 2024.

Which of the statements given above is/are correct?
a) 1 and 2 only
b) 2 and 3 only
c) 1 and 3 only
d) 1, 2, and 3

Answer: d) 1, 2, and 3


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