Short Answer Question: Nature and Purpose of Business | Business Studies (BST) Class 11 - Commerce PDF Download

Q1: Organic Tea Ltd. is a Singapore based company dealing in import of tea from India and re-exporting it to many South East Asian countries. It has a huge godown near the sea port where it has made scientific arrangements for storing tea till it is re-exported.
(a) Name the type of trade in the above case.
(b) Name the aids to trade being utilised by Organic Tea Ltd. and which utility does it create.
Ans: (a) Entrepot trade.
(b) Warehousing services, time utility.

Q2: Different situations in different business are being elaborated below:
(a) Sahil had a match stick factory in Nepal which got destructed by the recent earthquake.
(b) Samsung company was charged with evasion of tax and asked to pay fine in crores which would lead to heavy losses for the company.
(c) Mr. Manish, a senior manager in a telecom company shared confidential information about the company with a competitor which led to huge losses for the company.
(d) Typewriters is becoming redundant.
Identify and explain types of business risk being referred to in all the above cases.
Ans: (a) Pure risks.
(b) Speculative risks.
(c) Non-insurable risks.
(d) Insurable risks.

Q3: Identify the characteristics of business in the following statements:
(a) Departmental stores purchasing goods from small manufacturers and selling under one roof.
(b) A car dealer buys and sells cars on regular basis.
(c) A furniture dealer buys office chairs at Rs. 500 each and sells them for Rs. 650 each. Rs. 150 per chair is the extra money earned to meet business expenses and for future growth.
(d) Workers at Maruti Udyog Ltd. went on strike for more than a month demanding raises in wages. The company suffered huge losses due to loss of production and sale.
Ans:  (a) Production or procurement of goods and services.
(b) Dealing in goods and services on a regular basis.
(c) Profit earning.
(d) Element of risk.

Q4: Ankit has two buffaloes, one cow and one calf. He takes care of them and sells the milk extracted from them to people. Also, the milk which is left unsold, is used by him for producing milk products like ghee, curd and sometimes kulfi too. He is very popular for his honesty and pure quality of the products. He gives entire credit of his success to his love for the animals that he has.
(a) Which kind of business activity is he engaged in?
(b) Under which sectors is he working? State.
Ans: (a) Industry.
(b) Primary-Genetic industry.

Q5: Mr. Harish Kalra is a farmer and cultivates sugarcane on a large piece of land in a district in Maharasthra. Mr. Harish has sold his ancestral house for RS. 40 lakhs. His son, Saksham proposes him to establish a sugar mill with this money as the raw material sugarcane will be available from their fields.
(a) Mention and define the type of industry in which Harish is engaged in.
(b) Also define the type of manufacturing industry his son, Saksham plans to set up.
Ans: (a) Primary industry.
(b) Processing industry.  

Q6: Classify the following into primary, secondary and tertiary industries.
(a) Banking. (b) Lumbering. (c) Oil refinery.
(d) Warehousing. (e) Mining. (f) Sugar industry.
Ans: Primary industries : (b) and (e).
Secondary industries : (c) and (f).
Tertiary industries : (a) and (d).

Q7: All human beings fulfill their different needs by performing certain activities. Can you suggest and explain the activities undertaken by them?
Ans: Explain economic and non-economic activities.

Q8: Darshan Sharma prepares ‘Sohanpapri’ for customers during Diwali season every year. He prepared more ‘Sohanpapri’ due to increased demand with adulterated ingredients. He employeed women and children for packing and paid them less salary. This way he generated good profit from himself.
(a) Which objective of business is not fulfilled?
(b) Give any two values neglected by Darshan Sharma.
Ans: Social objective.
Value Points:
(i) Child labour.
(ii) Pure ingredients.

Q9: Name and explain the two characteristics of business which involve possibility of loss.
Ans: The two characteristics of business which involve possibility of loss are:
(a) Uncertainty of Return.
(b) Element of Risk.

Q10: Identify the service which is related to the following cases:
(a) The service which helps in removing hindrance of time.
(b) The service which helps in removing hindrance of risk.
(c) The service which helps in removing hindrance of knowledge.
(d) The service which helps in removing hindrance of place.
(e) The service which helps in removing hindrance of exchange of information among producers, consumers and traders.
Ans: (a) Warehousing.
(b) Insurance.
(c) Advertising.
(d) Transport.
(e) Banking.

Q11: State the different types of economic activities.
Ans: Business, profession and Employment.

Q12: Name the trade where the goods are bought from the foreign country.
Ans: Import trade.

Q13: State examples of Analytical industries.
Ans: Petrol, diesel

Q14: Which industry provides services to primary and secondary industry?
Ans: Tertiary industry

Q15: Give the meaning and two examples of Economic activities.  
Ans: It means an activity aimed at earning money. Business is also aimed at earning money or livelihood by satisfying human needs.
Example:
A person selling tea and coffee in the railway station.
Doctor treating patients at his clinic.