ABSTRACT
This chapter discusses two matters which are bound to arise from this inevitable existence of risk and uncertainyt. It argues that the extremely simple model—with no indivisibilities and with perfect competition—the existence of risks and uncertainties will give a real function for the entrepreneur. This chapter explains what is the function of this new 'factor of production'. It also discusses what individual entrepreneurs' attitudes to risks and uncertainties may be and what it is, therefore, which decides which risks and uncertainties a man will face and which he will not. The chapter assumes that each firm or farm is run by only one entrepreneur. They have, therefore, incomes from wages and from interest on their property. The entrepreneurial profits which they make on running firms and farms are thus net sums additional to their normal incomes from work and from the ownership of property.
