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

Q1: Harish produces wheat for personal consumption. Will it be a business activity?
Ans: No, as it is not performed for earning profit.

Q2: A person sells his old car at a profit. Can it be termed as a business activity? Explain.
Ans: No, because business involves dealing in goods on regular basis. Brief Explanation of features of business is given in this document above.

Q3: Risk is an inherent element of a Business. Do you agree? Explain.
Ans: Meaning and Nature of Business Risks detailed answer is given in this document above.
Role of Profit in Business:

• It is source of income for the business man.
• It provides funds for expansion.
• It is an indicator of efficiency of business man.
• It builds up reputation.

Q4: What are the different types of economic activities?
Ans: There are various types of economic activities. Namely,

• Profession
• Business
• Employment

Q5: Name the industries that furnish support to other fellow industries.
Ans: Tertiary industries are involved in furnishing support to all the primary and secondary industries.

Q6: Categorise the occupation in which the employees work for others and get paid in return.

• Profession
• Business
• Employment
• None of the above

Ans: Employment

Q7: What is the reward that a businessman earns for bearing risk?
Ans: When a businessman bears the risk, the reward that he’ll get is – earning the profit.

Q8: Mention the risks that are involved in the business.
Ans: Every aspect has its own risk factors. So does business has too. Namely,

• Business risks arise due to a few uncertain and unexpected situations
• It is a quintessential part of any business 
• However, profit is the reward for bearing the risks

Q9: What is commerce and its significance in modern life?
Ans: Commerce is the control of business among economic agents. Usually, it refers to the exchange of commodities, services or items of value, among companies or entities. The significance of Commerce are,

• Commerce acts as a catalyst between the manufacturers and customers
• It establishes employment opportunities
• It encourages trade in the Global level
• Assists in the growth of developing the industries
• Helps during exigencies like the natural calamities – earthquake, flood, drought etc.,

Q10: What are the differences between primary and secondary industry?
Ans:


Q11: Insurance is known as the tertiary industry. Explain.
Ans: Insurance is the support service to both the primary and secondary industries. The tertiary industry is the section of the economy that contributes services to its customers, including a broad array of businesses such as schools, financial institutions and restaurants. It is also called as the tertiary sector or service industry/sector.