Artificial Intelligence

CBSE Class 10 Employability Skills Unit 4 Entrepreneurial Skills MCQs with Answers (2026–27)

Class 10 · Artificial Intelligence

Preparing for the CBSE Class 10 Employability Skills Examination (2026–27)? This article contains the 30 most important Multiple Choice Questions (MCQs) from Unit 4 – Entrepreneurial Skills, designed according to the latest CBSE curriculum.

These MCQs are ideal for board examinations, school tests, periodic assessments, pre-board examinations, competency-based learning, and quick revision. Every question includes the correct answer, detailed explanation, and reasons why the remaining options are incorrect, helping students understand concepts instead of simply memorizing them.

? Topics Covered

  • Entrepreneurship and Self-employment
  • Difference between Entrepreneur and Wage Employment
  • Role of Entrepreneurs in Society
  • Importance of Entrepreneurship
  • Qualities of Successful Entrepreneurs
  • Functions of Entrepreneurs
  • Entrepreneurial Myths and Facts
  • Business Capital
  • Entrepreneurial Career Stages
  • Risk-taking and Innovation
  • Decision Making and Business Management
  • Creating Employment Opportunities
  • Sharing Wealth
  • Customer Satisfaction
  • Career and Self-employment Opportunities

? Exam Tip: CBSE frequently asks competency-based, case-study, assertion-reason, and application-oriented questions from Entrepreneurial Skills. Instead of memorizing definitions, understand how entrepreneurs solve problems, take risks, make decisions, and contribute to society.

CBSE Class 10 Employability Skills Unit 4 Entrepreneurial Skills MCQs with Answers

Q1. Entrepreneurship is a type of self-employment where a person runs a business to satisfy people's needs while:

A. Avoiding all types of risks
B. Looking for ways to improve and make profits
C. Working for a fixed salary from an organization
D. Only selling existing products without new ideas

Show Answer & Explanation

Correct Answer: B. Looking for ways to improve and make profits

Explanation: Entrepreneurship means running a business that satisfies customers' needs while continuously improving products or services and earning profits.

Why other options are incorrect:

  • A. Entrepreneurs take calculated risks instead of avoiding them.
  • C. Working for a fixed salary is wage employment.
  • D. Entrepreneurs continuously innovate and improve their business.

Q2. A person who works for an individual or an organization and receives a salary is engaged in:

A. Self-employment
B. Entrepreneurship
C. Wage employment
D. Creative employment

Show Answer & Explanation

Correct Answer: C. Wage employment

Explanation: In wage employment, a person works for another individual or organization and receives a fixed salary or wages.

Why other options are incorrect:

  • A. Self-employed people work for themselves.
  • B. Entrepreneurs own and manage businesses.
  • D. Creative employment is not a recognized employment category.

Q3. According to the example of Ramu and Ramya, what makes an entrepreneur different from a regular businessman?

A. An entrepreneur only works from a shop.
B. An entrepreneur takes risks and introduces new ideas to grow.
C. A businessman always travels to find customers.
D. Both are exactly the same.

Show Answer & Explanation

Correct Answer: B. An entrepreneur takes risks and introduces new ideas to grow.

Explanation: Entrepreneurs constantly look for new opportunities, innovate, and take calculated risks to expand their businesses.

Why other options are incorrect:

  • A. Entrepreneurs can operate from anywhere.
  • C. Travelling is not the defining characteristic.
  • D. Entrepreneurs differ from traditional businessmen because of innovation and risk-taking.

Q4. Entrepreneurs help society by using __________ materials to reduce production costs.

A. Imported
B. Expensive
C. Local
D. Synthetic

Show Answer & Explanation

Correct Answer: C. Local

Explanation: Using locally available materials reduces production costs and also supports the local economy and employment.

Why other options are incorrect:

  • A. Imported materials generally increase costs.
  • B. Expensive materials reduce profitability.
  • D. Synthetic materials are not always locally available.

Q5. What usually happens to product prices when many entrepreneurs compete in the same market?

A. Prices increase.
B. Prices remain unchanged.
C. Prices decrease due to competition.
D. Prices are decided only by the government.

Show Answer & Explanation

Correct Answer: C. Prices decrease due to competition.

Explanation: Healthy competition encourages businesses to improve quality and offer products at competitive prices, benefiting customers.

Why other options are incorrect:

  • A. Increased competition usually lowers prices.
  • B. Market competition often affects pricing.
  • D. Prices are generally influenced by market demand and competition.

Q6. Bharti from Bihar started making earrings using which locally available material?

A. Plastic
B. Jute
C. Gold
D. Silver

Show Answer & Explanation

Correct Answer: B. Jute

Explanation: Bharti used locally available jute to manufacture earrings, creating employment opportunities for women in her village.

Why other options are incorrect:

  • A. Plastic was not used in the example.
  • C. Gold would significantly increase production costs.
  • D. Silver was not the material mentioned.

Q7. Which quality of an entrepreneur reflects strong belief in one's own abilities?

A. Creativity
B. Patience
C. Hard Work
D. Confidence

Show Answer & Explanation

Correct Answer: D. Confidence

Explanation: Confidence enables entrepreneurs to make decisions, overcome challenges, and pursue opportunities successfully.

Why other options are incorrect:

  • A. Creativity means generating new ideas.
  • B. Patience means remaining calm during difficult situations.
  • C. Hard work means putting in consistent effort.

Q8. Zafar admitted his mistake and said, "I take __________ for it." Which entrepreneurial quality does this show?

A. Responsibility
B. Credit
C. Loan
D. Leave

Show Answer & Explanation

Correct Answer: A. Responsibility

Explanation: Successful entrepreneurs accept responsibility for both their achievements and their mistakes.

Why other options are incorrect:

  • B. Credit refers to recognition for success.
  • C. A loan is borrowed money.
  • D. Leave means taking time away from work.

Q9. An entrepreneur who remains positive and continues working despite difficulties demonstrates:

A. Creativity
B. Persistence
C. Decisiveness
D. Professionalism

Show Answer & Explanation

Correct Answer: B. Persistence

Explanation: Persistence means continuing to work towards goals without giving up, even when facing obstacles.

Why other options are incorrect:

  • A. Creativity focuses on innovation.
  • C. Decisiveness means making timely decisions.
  • D. Professionalism refers to ethical and responsible behaviour.

Q10. Which function of an entrepreneur involves deciding what to produce, how much to produce, and where to sell it?

A. Managing the Business
B. Dividing Income
C. Making Decisions
D. Taking Risk

Show Answer & Explanation

Correct Answer: C. Making Decisions

Explanation: Entrepreneurs make important business decisions related to production, pricing, marketing, and sales to ensure business success.

Why other options are incorrect:

  • A. Managing the business involves supervising employees and daily operations.
  • B. Dividing income refers to allocating money for expenses and investments.
  • D. Taking risk means accepting uncertainty in business.

Q11. Ali owns a diamond factory and ensures that employees receive their salaries on the 1st of every month. Which entrepreneurial function is he performing?

A. Creating Innovation
B. Managing the Business
C. Taking Risk
D. Making Decisions

Show Answer & Explanation

Correct Answer: B. Managing the Business

Explanation: Managing the business includes hiring employees, assigning responsibilities, supervising work, and ensuring salaries and other business operations are carried out smoothly.

Why other options are incorrect:

  • A. Innovation involves introducing new ideas or products.
  • C. Taking risk means accepting uncertainty in business.
  • D. Decision-making involves choosing among different business alternatives.

Q12. When an entrepreneur spends money on raw materials, rent, electricity, and salaries, which function is being performed?

A. Risk-taking
B. Creating Innovation
C. Dividing Income
D. Identifying Customer Needs

Show Answer & Explanation

Correct Answer: C. Dividing Income

Explanation: Dividing income means allocating business earnings for various expenses such as rent, raw materials, salaries, taxes, and future investments.

Why other options are incorrect:

  • A. Risk-taking involves facing business uncertainties.
  • B. Innovation refers to creating something new.
  • D. Identifying customer needs is done before developing products or services.

Q13. In entrepreneurship, a "myth" refers to:

A. A proven business fact
B. A successful business strategy
C. A false belief or misconception
D. A new business opportunity

Show Answer & Explanation

Correct Answer: C. A false belief or misconception

Explanation: A myth is an incorrect belief that many people consider true, even though it is not supported by facts.

Why other options are incorrect:

  • A. A myth is not a proven fact.
  • B. It is not a business strategy.
  • D. It does not represent a business opportunity.

Q14. Ganesh introduced luxury cars such as BMWs in his car rental business. Which entrepreneurial myth does this example disprove?

A. Every business idea must be completely unique.
B. A lot of money is required to start a business.
C. Entrepreneurs are born, not made.
D. Only large businesses are entrepreneurial.

Show Answer & Explanation

Correct Answer: A. Every business idea must be completely unique.

Explanation: Ganesh used an existing business idea but improved it with innovation, showing that success comes from adding value rather than inventing an entirely new concept.

Why other options are incorrect:

  • B. This example is unrelated to investment.
  • C. It does not discuss entrepreneurial qualities.
  • D. The example focuses on innovation, not business size.

Q15. In business, "Capital" refers to:

A. The capital city where the business operates
B. The money required to start a business
C. The number of employees in a company
D. The annual profit earned by the business

Show Answer & Explanation

Correct Answer: B. The money required to start a business

Explanation: Capital is the initial amount of money invested to establish and operate a business.

Why other options are incorrect:

  • A. Capital city has no relation to business finance.
  • C. Employees are part of human resources.
  • D. Profit is earned after the business starts operating.

Q16. Sheila started a taxi service and provided newspapers and television for customers. Which entrepreneurial myth does her example break?

A. A large investment is necessary to start a business.
B. Entrepreneurs are born, not made.
C. Only large businesses can be entrepreneurial.
D. Every business idea must be unique.

Show Answer & Explanation

Correct Answer: C. Only large businesses can be entrepreneurial.

Explanation: Sheila's small taxi business demonstrates that entrepreneurship is about innovation and value creation, regardless of business size.

Why other options are incorrect:

  • A. This example is not mainly about investment.
  • B. It does not discuss learning entrepreneurship.
  • D. The example emphasizes business size, not uniqueness.

Q17. Which statement correctly explains the myth "Entrepreneurs are born, not made"?

A. Entrepreneurial skills can only be inherited.
B. Entrepreneurship is a mindset and can be learned through practice.
C. Only highly talented people can become entrepreneurs.
D. Every entrepreneur must be a born leader.

Show Answer & Explanation

Correct Answer: B. Entrepreneurship is a mindset and can be learned through practice.

Explanation: Entrepreneurial skills such as leadership, creativity, communication, and decision-making can be developed through education, experience, and continuous learning.

Why other options are incorrect:

  • A. Entrepreneurial ability is not inherited.
  • C. Anyone can develop entrepreneurial skills.
  • D. Leadership can also be learned.

Q18. A doctor who owns and operates a private clinic is considered:

A. Wage-employed
B. Self-employed
C. Unemployed
D. Social worker

Show Answer & Explanation

Correct Answer: B. Self-employed

Explanation: Self-employed individuals work independently and earn income from their own profession or business.

Why other options are incorrect:

  • A. Wage-employed people work for an employer.
  • C. The doctor is actively working.
  • D. Social work is different from self-employment.

Q19. Which is the first stage of the entrepreneurial career process?

A. Survive
B. Grow
C. Exit
D. Enter

Show Answer & Explanation

Correct Answer: D. Enter

Explanation: The entrepreneurial career process begins with the Enter stage, followed by Survive and then Grow.

Why other options are incorrect:

  • A. Survive comes after entering the business.
  • B. Growth occurs after the business becomes stable.
  • C. Exit is not the first stage.

Q20. Sanjana expanded her grocery business from one shop to branches in two different cities. Which stage of entrepreneurship does this represent?

A. Enter
B. Survive
C. Grow
D. Start-up

Show Answer & Explanation

Correct Answer: C. Grow

Explanation: Expanding an existing business to new markets or locations represents the Grow stage of entrepreneurship.

Why other options are incorrect:

  • A. Enter refers to starting a business.
  • B. Survive focuses on sustaining the business.
  • D. Start-up is not one of the career stages mentioned in the CBSE syllabus.

Q21. Scenario: Jacob owns a coaching institute and starts morning batches to attract more students in a competitive market. Which stage of the entrepreneurial career process is he in?

A. Enter
B. Survive
C. Grow
D. Retire

Show Answer & Explanation

Correct Answer: B. Survive

Explanation: During the Survive stage, entrepreneurs focus on retaining customers, competing effectively, and ensuring that their business remains successful in the market.

Why other options are incorrect:

  • A. Enter refers to starting a new business.
  • C. Grow means expanding an already stable business.
  • D. Retirement is not a stage of the entrepreneurial career process.

Q22. Which of the following is an important role of an entrepreneur in society?

A. Creating employment opportunities
B. Sharing wealth
C. Fulfilling customer needs
D. All of the above

Show Answer & Explanation

Correct Answer: D. All of the above

Explanation: Entrepreneurs contribute to society by creating jobs, producing useful goods and services, sharing wealth through employment, and satisfying customer needs.

Why other options are incorrect:

  • A. This is one important role but not the only one.
  • B. Entrepreneurs also distribute wealth by creating income opportunities.
  • C. Meeting customer needs is another important role.

Q23. A long-term profession or occupation that a person follows throughout life is called a:

A. Job
B. Career
C. Hobby
D. Task

Show Answer & Explanation

Correct Answer: B. Career

Explanation: A career is the long-term professional journey that a person chooses and develops over many years.

Why other options are incorrect:

  • A. A job may be temporary and forms only part of a career.
  • C. A hobby is an activity done for enjoyment.
  • D. A task is a specific piece of work.

Q24. An entrepreneur who donates money to build a hospital is contributing towards:

A. Personal Profit
B. Society
C. Capital Formation
D. Risk-taking

Show Answer & Explanation

Correct Answer: B. Society

Explanation: Entrepreneurs often contribute to social welfare through activities such as building schools, hospitals, and supporting community development.

Why other options are incorrect:

  • A. Donating money does not increase personal profit.
  • C. Capital formation refers to investment in business.
  • D. This action is related to social responsibility, not risk-taking.

Q25. Which entrepreneurial function involves handling uncertainties such as fire, theft, accidents, or business losses?

A. Making Decisions
B. Managing the Business
C. Taking Risk
D. Creating Innovation

Show Answer & Explanation

Correct Answer: C. Taking Risk

Explanation: Every business involves uncertainty. Entrepreneurs accept calculated risks while making important business decisions.

Why other options are incorrect:

  • A. Decision-making involves choosing among alternatives.
  • B. Management focuses on daily business operations.
  • D. Innovation means introducing new ideas or methods.

Q26. Why do entrepreneurs continuously develop new products, services, or methods?

A. To reduce their income
B. To increase the value, importance, and income of the business
C. To avoid interacting with customers
D. Because their employer instructs them to do so

Show Answer & Explanation

Correct Answer: B. To increase the value, importance, and income of the business

Explanation: Innovation helps entrepreneurs satisfy customers, remain competitive, improve business value, and earn higher profits.

Why other options are incorrect:

  • A. Innovation aims to increase income, not reduce it.
  • C. Entrepreneurs maintain close contact with customers.
  • D. Entrepreneurs work independently and are not directed by an employer.

Q27. In entrepreneurship, "wealth" means:

A. Having only enough money to buy food
B. Having sufficient money to live a comfortable life
C. Only the entrepreneur's personal bank balance
D. Money borrowed from a bank

Show Answer & Explanation

Correct Answer: B. Having sufficient money to live a comfortable life

Explanation: Wealth refers to financial well-being. Entrepreneurs create wealth not only for themselves but also for employees, suppliers, and society.

Why other options are incorrect:

  • A. Wealth is more than meeting basic needs.
  • C. Wealth benefits many stakeholders, not only the entrepreneur.
  • D. Bank loans are liabilities, not wealth.

Q28. Every entrepreneur must begin with a completely new and unique business idea.

A. True
B. False

Show Answer & Explanation

Correct Answer: B. False

Explanation: Entrepreneurs can succeed by improving existing products, services, or business models. Innovation is often about doing something better rather than inventing something entirely new.

Why the other option is incorrect:

  • A. This is a common entrepreneurial myth and is not true.

Q29. Assertion (A): A doctor working in a hospital is wage-employed.
Reason (R): Wage-employed people work for an organization and receive a salary.

A. Both A and R are true, and R is the correct explanation of A.
B. Both A and R are true, but R is not the correct explanation of A.
C. A is true, but R is false.
D. A is false, but R is true.

Show Answer & Explanation

Correct Answer: A. Both A and R are true, and R is the correct explanation of A.

Explanation: A doctor employed by a hospital works for an organization and receives a salary. Therefore, the doctor is wage-employed, and the reason correctly explains the assertion.

Why other options are incorrect:

  • B. The reason directly explains the assertion.
  • C. The reason is true.
  • D. Both statements are correct.

Q30. Which of the following is NOT a quality of a successful entrepreneur?

A. Hardworking
B. Giving up easily when facing difficulties
C. Creative
D. Patient

Show Answer & Explanation

Correct Answer: B. Giving up easily when facing difficulties

Explanation: Successful entrepreneurs are persistent. They learn from failures, overcome challenges, and continue working towards their goals instead of giving up.

Why other options are incorrect:

  • A. Hard work is an essential entrepreneurial quality.
  • C. Creativity helps entrepreneurs develop innovative solutions.
  • D. Patience is important for long-term business success.

? Quick Revision

  • Entrepreneurship is a form of self-employment that focuses on innovation, customer satisfaction, and profit.
  • Wage-employed individuals work for an employer and receive a salary.
  • Successful entrepreneurs are confident, creative, responsible, hardworking, patient, and persistent.
  • Major entrepreneurial functions include decision-making, business management, innovation, risk-taking, and dividing income.
  • Capital is the money required to start a business.
  • Common entrepreneurial myths include: entrepreneurs are born, every idea must be unique, and only large businesses are entrepreneurial.
  • The entrepreneurial career stages are Enter → Survive → Grow.
  • Entrepreneurs contribute to society by creating jobs, generating wealth, and fulfilling customer needs.
  • Innovation helps businesses remain competitive and increase profits.
  • Persistence and a positive attitude are key characteristics of successful entrepreneurs.

? Exam Tip

For the CBSE Class 10 Employability Skills Examination, focus on the qualities, functions, myths, career stages, and social role of entrepreneurs. CBSE frequently asks competency-based, assertion-reason, case-study, and application-oriented questions from this unit. Understanding real-life entrepreneurial examples will help you answer such questions confidently.