(a) (i) Risk-Bearing Function : It is the most important and specific function of an entrepreneur. Every business involves risk. There is no other factor of production except the entrepreneur, who bears risk of the business. The risk is caused by uncertainities attached to production, investment and profits. Another big risk is of technological obsolescence and frequent changes in Government policies. The entrepreneur has to calculate all these risks and then plan the organisation of various factors of production in different proportions.

(ii) Decision-making function : All the vital decisions of business are taken by the entrepreneur. He conceives the idea of a particular business after making an intensive study of the market conditions, business projects and economic viability. He takes all the vital decisions with regard to ‘what to produce’, ‘how much to produce’ how to produce and in what proportion to combine the factors of production. 

(b) Cost-push inflation refers to inflationary rise in prices which arises due to increase in costs. 

1. Fluctuations in Output and Supply : The wide fluctuations in production of foodgrains has been mainly responsible for price rise. There was a remarkable increase in production of foodgrains during first two plans and supply of foodgrains was good. But fluctuation in foodgrain production, support prices administered by Government, the tactics of hoarding, adopted by the middlemen and subsequently by the farmers too (utilizing the credit facilities – available from co-operatives and commercial banks), resulted in an increase in price. The power breakdowns, strikes and lockouts result in lower production of manufactured goods. As such both, the primary and secondary sectors recorded a price rise almost dining all the plan periods. 

2. Public Distribution System : The defective working of the public distribution system results in an uneven supply of various goods, ultimately affecting the prices of essential commodities by way of artificial scarcity. 

3. Rise in Wages : The rise in the general price level raises the cost of living which in turn, leads to demand for higher wages by workers. When the demand for higher wages is met, it will lead to further rise in costs or prices. The fresh rise in prices will again be compensated by giving still higher wages to the workers. This is termed as ‘wage push inflation’.