Class 11th Bussiness Studies Chapter 1 imp QA

 

   Class-11 Bussiness Studies

Chapter- 1 (Business, Trade and Commerce)

 

 

Multiple Choice Questions-

Question 1. 
Which of the following activities does not characterise business activity-
(a) Creation of goods and services 
(b) Existence of risk 
(c) Sale or exchange of goods and services 
(d) Salary or wages.
Answer:
(d) Salary or wages.

Question 2. 
Oil refineries and sugar mills fall under which broad category of industry?
(a) Primary
(b) Secondary 
(c) Tertiary
(d) None of these 
Ans:
(b) Secondary 

Question 3. 
Which of the following cannot be classified as an auxiliary to trade?
(a) Mining
(b) Insurance 
(c) Warehousing
(d) Transportation 
Answer:
(a) Mining

Question 4. 
What is the name given to an occupation in which people regularly work for others and receive remuneration in return? 
(a) Business
(b) Employment 
(c) Profession
(d) None of these 
Answer:
(b) Employment

Question 5. 
What are those industries called which provide supporting services to other industries? 
(a) Primary industry
(b) Secondary industry
(c) Tertiary industry
(d) None of these 
Answer:
(c) Tertiary industry

Question 6. 
Which of the following cannot be classified as a business objective?
(a) Investment
(b) Productivity 
(c) Innovation
(d) Profitability 
Answer:
(a) Investment

Question 7. 
Business risk is not likely to occur
due to - (a) Change in government policy
(b) Good management 
(c) Dishonesty of employees
(d) Power failure 
Answer:
(b) Good management

Question 8. 
An economic activity is-
(a) An activity done out of love and sympathy 
(b) An activity done out of patriotism 
(c) An activity done to earn money for living
(d) All of the above. 
Answer:
(c) An activity done to earn money for living

Question 9. 
Industry includes-
(a) consumption of goods
(b) buying and selling of goods 
(c) storage of goods
(d) manufacturing of goods 
Answer:
(d) Manufacture of goods

Question 10. 
Which of the following is correct-
(a) Trade is a part of commerce 
(b) Business is a part of trade 
(c) Commerce is a part of trade
(d) Trade and commerce are parts of each other. 
Answer:
(a) Trade is a part of commerce

Question 11. 
Risk is related to which business event?
(a) Change in consumer taste or fashion 
(b) Change in production methods 
(c) Market competition
(d) All of the above 
Answer:
(d) All of the above

Question 12. 
Primary industry is related to-
(a) mining and production of natural resources and development of fauna and vegetation 
(b) construction of buildings, dams, bridges etc. 
(c) production of finished goods after passing through various processes of raw material
(d) making products by joining various parts. 
Answer:
(a) mining and production of natural resources and development of fauna and vegetation

Question 13. Which 
of the following is not included in secondary or second industry?
(a) Analytical industry
(b) Extractive industry 
(c) Process industry
(d) Integrated industry
Answer:
(b) Extractive industry 

 

Fill in the Blanks Questions 
Fill in the following blanks-

1. In ancient times, ...................... contributed significantly in financing domestic and foreign trade through currency and letters of credit. (Indigenous banking system/Hundi and Chitti)
2. .................... were important components of the economic life of people in ancient times. (Trade/Agriculture and Animal Husbandry) 
3. Make in India initiative was taken by the Government of India on ..................... (25 September, 2014/25 September, 2015) 
4. After independence, India agreed to economic liberalization in ..................... (1992/1991) 
5. ...................... industries combine various components and give them a new product through a process. (Extraction/Synthetic) 
6. There is an old principle, no risk, no .................... (Loss/Profit) 
Answer:
1. Indigenous Banking System, 
2. Agriculture and Animal Husbandry, 
3. September 25, 2014 
4. Year 1991, 
5. Artificial, 
6. Profit 

 

True/False Questions 
State whether the following statements are true or false:

1. In ancient India, Tamralipti was one of the largest ports connected by sea and land routes with the West and Far East. 
2. The institution of Jagat Seth had developed in ancient India. 
3. The Indian economy today is not one of the fastest growing economies in the world. 
4. Cooking food by a housewife for her family is an economic activity. 
5. Business is derived from being busy. 
6. Ancillary activities are an integral part of the whole business, especially commerce. 
7. Tertiary industries are not engaged in providing ancillary services to primary and secondary industries. 
8. The main objective of business is not to earn profit. 
Answer:
1. True, 
2. True, 
3. False, 
4. False, 
5. True, 
6. True, 
7. False, 
8. True 

 

Very short answer type questions-

Question 1. What was the main basis of the ancient Indian economy? 
Answer:
Land and sea inland and foreign trade and commerce were the main basis.

 

Question 2. Mention the means of extra income of people in ancient India (any two). 
Answer:

·       weaving of cotton fabrics 

·       Manufacture of transport means (carts, boats and ships). 

 

Question 3. Tell any two characteristics of Hundi.
Answer:

·       An unconditional promise or order to pay money 

·       Convertible by transfer through legal tender.

 

Question 4. Which was the main port on the southern or Coromandel coast during the fifteenth and early sixteenth centuries?
Answer:
Pulicat was the main port. 

 

Question 5. Which were the main trade centres in ancient India? (Any four) 
Answer:

·       Pataliputra 

·       Taxila 

·       Indraprastha 

·       Bharuch.

 

Question 6. What were the main items exported in ancient India? 
Answer:
Spices, wheat, sugar, indigo, opium, sesame oil, cotton, silk, live cattle and animal products. 

 

Question 7. What were the major items imported in ancient India?
Answer:
Horses, animal products, sugar, silk, gems, gold, silver, tin, copper, lead, ruby, topaz, coral, glass and amber etc.

 

Question 8. What are the main recent initiatives of the Government of India?
Answer:
'Make in India', 'Skill India', 'Digital India' and the newly formulated import and trade foreign trade policy.

 

Question 9. What is the main objective of the 'Make in India' initiative?
Answer:
The main objectives of Make in India are to promote employment generation and skill development in 25 selected sectors of the economy.

 

Question 10. What are called economic activities? 
Answer:
Economic activities are those activities through which we earn money for our living. 

 

Question 11. Write any two examples of economic activities. 
Answer:

·       A worker working in a factory. 

·       A doctor working in his clinic. 

 

Question 12. Write any two examples of non-economic activities. 
Answer:

·       A housewife cooking food for her family. 

·       A child helping an old man to cross the road. 

 

Question 13. How many categories can economic activities be divided into? Write their names. 
Answer:
Into three categories-

·       Business 

·       Occupation 

·       employment. 

 

Question 14. 
What is business?
Answer:
Business is an economic activity that involves production and sale of goods and provision of services with the aim of earning profit and providing social satisfaction.

 

Question 15. 
Write any two characteristics of business. 
Answer:

·       Business is an economic activity.

·       In business, there is regular exchange of goods and services. 

 

Question 16. 
What tasks does an entrepreneur perform to run a business? 
Answer:

·       to arrange finances 

·       produce 

·       Marketing 

·       Managing human resources.

 

Question 17. 
What is meant by marketing?
Answer:
Marketing means all those activities which are related to the exchange of goods and services from the producer to those people who need them, at the place and time and at the price they are willing to pay.

 

Question 18. 
What is risk? 
Answer:
Risk is an uncertainty that may lead to business loss. 

 

Question 19. 
What do you understand by profession?
Answer:
Profession includes those activities which require special knowledge and skills and a person uses them to earn income in his business.

 

Question 20.
What do you mean by employment?
Answer:
Employment refers to those occupations in which people regularly work for others and receive remuneration in return. 

 

Question 21. 
What is included in business?
Answer:
Business includes production, extraction, manufacturing and service industries and commerce i.e. trade and supporting activities of trade.

 

Question 22. 
What do you mean by commerce?
Answer:
Commerce means those activities which remove the barriers related to person, place, time, finance and information in the exchange of goods and services.

 

Question 23. 
Mention any two characteristics of commerce. 
Answer:

·       Commerce is a part of business.

·       Commerce includes all those activities by which various obstacles in exchange are removed.

 

Question 24. 
Mention two main characteristics of a profession. 
Answer:

·       The profession requires specialized educational knowledge and technical acumen. 

·       The purpose of profession is to serve others. 

 

Question 25. 
What is meant by industry?
Answer:
Industry means those economic activities which are related to transforming resources into useful goods with the help of mechanical equipment and technical skills etc.

 

Question 26. 
Classify primary industries and give two examples each.
Answer:

·       Extractive industries such as farming, hunting and fishing. 

·       Reproductive industries like animal breeding farms, poultry farming.

 

Question 27. 
Give any two examples of secondary or intermediate industry. 
Answer:

·       Manufacture of steel. 

·       Preparation of various products from mineral oil. 

 

Question 28. 
What is called extractive industry?
Answer:
Things obtained from the lap of nature by human efforts which are used directly or indirectly are called extractive industries.

 

Question 29. 
What do you mean by tertiary or service industry?
Answer:
Service industries are those industries which are engaged in providing supportive services to industries and carry out business activities.

 

Question 30. 
What do you understand by internal or domestic trade?
Answer:
The trade in which the purchase and sale of goods and services is done within the geographical boundaries of a single country is called internal or domestic trade.

 

Question 31. 
What is external or foreign trade?
Answer:
External or foreign trade is the trade in which the purchase and sale of goods and services is done between the persons or institutions of two or more countries.

 

Question 32. 
What is re-export trade?
Answer:
When goods are imported to be exported to another country, it is called re-export trade.

 

Question 33. 
Explain the usefulness of supporting activities of trade.
Answer:
Supporting activities of trade make possible the transfer of goods, storage, financing, protection from risk and promotion of sales of goods.

 

Question 34. 
What are the functions performed by enterprises to run their business? 
Answer:

·       Finance, 

·       Production, 

·       Marketing and 

·       Human Resource Management. 

 

Question 35. 
What is human resource management?
Answer:
Human resource management ensures the availability of people with the skills to perform various tasks in the enterprise.

 

Question 36. 
Write the names of supporting activities of trade. 
Answer:
Transportation and communication, banking and finance, insurance, storage, advertising, packaging etc. 

 

Question 37. 
Why is profit considered an essential objective of business? Give two reasons. 
Answer:

·       This is the source of income for the businessman. 

·       This is necessary for the growth and expansion of the business. 

 

Question 38. 
What do you mean by innovation?
Answer:
Innovation means inclusion of new ideas or bringing some novelty in the method by which work is done.

 

Question 39. 
What do you understand by business risk?
Answer:
Business risk refers to the possibility of insufficient profit or loss which occurs due to uncertainties or accidental events beyond control.

 

Question 40. 
Write any four economic reasons for the occurrence of business risk.
Answer:

·       Uncertainty in demand 

·       Competition 

·       Amount payable by customers 

·       Change in technology or method of production.

 

Question 41. 
Suggest any two ways to avoid business risks. 
Answer:

·       Not making high-risk trades

·       Purchasing an insurance policy for the business. 

 

 

Short answer type questions-

 

Question 1. Why was the indigenous banking system adopted in ancient India?
Answer:
The indigenous banking system was adopted in ancient India because this system contributed significantly in financing domestic and foreign trade through money lending and letters of credit. With the development of banking, people started depositing precious and valuable metals with the persons or seths working as bankers and this money became a means to supply resources to the manufacturers to produce more goods.

 

 

Question 3. Write a short note on 'Merchant Corporation'.
Answer:
Merchant Corporation- In ancient times the business community derived its prestige and power from guilds, which were autonomous corporations formed to protect their interests. These corporations were formally organised, made rules for their own members and a code of business conduct which was accepted and respected even by kings.

The guild heads dealt directly with the king or tax collectors and settled market tolls on behalf of their fellow merchants at a fixed amount. Guild businessmen acted as custodians of religious interests. By levying corporate taxes on their members, they undertook the construction of temples. Thus merchant corporations enabled big businesses to gain power in society.

 

 

Question 4. Write short notes on any two major trade centres of ancient India.
Answer:
1. Takshila- It served as a major centre on the important land route between India and Central Asia. It was also a city of financial commercial banks. It was an important intellectual centre during the Buddhist period. The famous Takshila University developed here.

2. Ujjain- Sumalaini and carnelian stones, muslin and maul cloth were exported from Ujjain to various centres. It also had trade relations with western countries through the land routes of Takshila and Peshawar.

Question 5. Explain any two characteristics of business.
Answer:
1. Profit-Every activity in business is done with the objective of earning profit. Any activity which does not have the objective of earning profit cannot be included in business because without earning profit, no business can maintain its existence for a long time.

2. Uncertainty of return- There is uncertainty of return i.e. profit in business. There may or may not be profit in it. In fact, there is hope of getting profit on the capital invested in the business but it is not certain how much the profit will be or whether it will be there or not.

 

 

Question 6. Explain the duties of a businessman at the enterprise level. 
Answer:
Duties of a businessman at the enterprise level-

·       Finance arrangement- The main duty of a businessman is to arrange finance for the business. Here, finance arrangement is related to raising finance for running the business and using it properly.

·       Production- A businessman must also perform production related duties. Production means converting raw material into manufactured goods or producing services.

·       Marketing- Marketing refers to the entire activity involved in buying and selling of goods and services from the producer to those people who need them, at the place and time they are willing to pay and at the price they need.

·       Human Resource Management- It ensures the availability of people having the skills to perform various types of tasks in the enterprise.

 

 

Question 7. Write a short note on 'Make in India'.
Or 
What do you know about 'Make in India'?
Answer:
Make in India- The 'Make in India' initiative was launched by the Government of India on 25 September 2014 to encourage domestic and foreign companies to manufacture in India. The main objectives of the 'Make in India' initiative are to create employment and promote skills in the following 25 sectors of the economy - automobiles, automobile components, aviation, biotechnology, chemicals, manufacturing, defence, electrical machinery, electronic systems, food processing, information and technology and business process management, media and entertainment, mining, oil and gas, pharmaceuticals, ports and shipping, railways, renewable energy, roads and highways, space and astronomy, textiles and apparel, thermal power, tourism and honesty, welfare and leather products.
Thus, 'Make in India' focuses on the above 25 sectors. 

 

 

Question 8. There is a mutual relation between commerce, industry and trade. Explain.
Answer:
Mutual relation between commerce, industry and trade- Commerce, industry and trade, despite having separate existence, are directly and indirectly dependent on each other. Commerce includes buying and selling of goods, i.e. trade and supporting activities of trade. It is impossible to do commerce and trade without industry because buying and selling of goods and services is possible only when they are produced. Similarly, in the absence of trade and commerce, industries are useless. Because if the goods or services produced by the industry do not reach the consumers, then there is no justification for production. Industries will not be able to exist. This work can be accomplished efficiently through trade and supporting activities of trade, i.e. commerce.

 

 

Question 9. Mention any four characteristics of commerce. 
Answer:
Characteristics of commerce-

·       Commerce is an integral part of business.

·       Commerce includes all those activities by which the obstacles of time, place, finance and personal nature in exchange can be overcome.

·       Commerce acts as a link between producers or manufacturers and consumers and brings them together.

·       Commercial activities are necessary when entrepreneurs produce more goods than they require.