Chapter business-trade-and-commerce: Business, Trade and Commerce Short Questions | business studies Class 11 CBSE

Chapter business-trade-and-commerce: Business, Trade and Commerce Short Questions | business studies Class 11 CBSE | ByteNotes.in

Short Answer

Easy difficulty • Direct answer format

Easy

Question 1

Quick Recall

Why is business considered an economic activity?

Business is undertaken with the objective of earning money or livelihood, not out of love, affection, sympathy, or any other emotion.
It involves regular production, procurement, and sale of goods and services for profit, making it an income-generating activity.
It can be carried out on a small individual level (shopkeeper) or on a large organised level (company), both aimed at earning returns.

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Medium

Question 2

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What is meant by 'uncertainty of return' as a characteristic of business?

Uncertainty of return refers to the lack of knowledge relating to the amount of money that the business is going to earn in a given period.
Every business invests capital to run its activities with the objective of earning profit, but the exact amount of profit is never certain in advance.
There is always a possibility of losses being incurred despite the best efforts put into the business, making return inherently unpredictable.

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Medium

Question 3

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Distinguish between speculative risk and pure risk in business.

Speculative risks involve both the possibility of gain as well as the possibility of loss, arising from market fluctuations, demand-supply changes, or changes in consumer preferences.
Pure risks involve only the possibility of loss or no loss—there is no possibility of gain; examples include fire, theft, and strikes.
Speculative risks are linked to market conditions and business decisions, while pure risks arise from unforeseen events beyond business control.

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Short Answer

Medium difficulty • Direct answer format

Medium

Question 4

Quick Recall

What is Hundi? State any one of its types.

Hundi, literally meaning 'to collect', was an indigenous financial instrument written in vernacular language used to facilitate the safe transfer of money between parties for trading activities.
It avoided the risk of theft and robbery during long-distance travel and involved an unconditional promise or order to pay money, transferable by valid negotiation.
Dhani-jog is one type of Hundi—it is payable to any person with no liability over who received the payment.

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Question 5

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What are extractive industries? Give two examples.

Extractive industries are those that extract or draw products from natural sources, supplying basic raw materials that are mostly products of the geographical or natural environment.
Products of these industries are usually transformed into many other useful goods by manufacturing industries.
Important examples of extractive industries include farming, mining, lumbering, hunting, and fishing operations.

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Short Answer

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Medium

Question 6

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What is the role of profit as an objective of business?

Profit is a source of income for business persons and can finance the expansion and growth requirements of the business.
It indicates the efficient working of the business and reflects society's approval of the utility of business activities.
Profit builds the reputation of a business enterprise and acts as a reward for the risks undertaken by the entrepreneur.

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Medium

Question 7

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How does warehousing serve as an auxiliary to trade?

Warehousing removes the hindrance of time by enabling businesses to hold goods in stock and make them available as and when required.
It helps firms overcome the problem of storage and prevents loss or damage to goods held between production and sale.
By ensuring a continuous supply of goods, warehousing helps maintain prices at a reasonable level in the market.

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Question 8

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What is meant by genetic industries? Give two examples.

Genetic industries are those engaged in breeding plants and animals for their use in further reproduction, forming part of the primary sector.
Seeds and nursery companies are typical examples of genetic industries as they breed plant varieties for further agricultural use.
Other examples include cattle breeding farms, poultry farms, and fish hatcheries, all of which reproduce living organisms for commercial purposes.

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Medium

Question 9

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State any three human causes of business risk.

Dishonesty or carelessness of employees is a human cause of business risk that can lead to financial loss or operational failure.
Stoppage of work due to strikes, riots, or power failure disrupts production and can result in losses for the business.
Management inefficiency in decision-making or poor administration leads to suboptimal performance and increases the risk of losses.

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Medium

Question 10

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What is meant by 'market standing' as an objective of business?

Market standing refers to maintaining goodwill and reputation of a business in relation to its competitors, forming a distinct identity in the market.
A business enterprise must aim at offering competitive products at reasonable prices and serving customers to their satisfaction.
A strong market standing helps the enterprise to sustain in competitive markets and attract and retain loyal customers.

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Easy

Question 11

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How does transport serve as an auxiliary to trade?

Transport removes the hindrance of place by moving goods from the place of production to the markets for sale and consumption.
It facilitates movement of raw materials to the place of production and finished products from factories to consumers across the country.
Along with transport, communication facilities like postal services and telephone help producers, traders, and consumers exchange information with one another.

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Short Answer

Medium difficulty • Direct answer format

Medium

Question 12

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Explain the concept of social responsibility as an objective of business.

Social responsibility refers to the obligation of business firms to contribute resources for solving social problems and work in a socially desirable manner.
Business enterprises are part of society and must fulfil social responsibilities to survive and prosper in the long run beyond just earning profits.
Excessive focus on profit at the expense of social responsibility may lead to opposition and non-cooperation from affected sections of society.

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Medium

Question 13

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State any three differences between business and employment.

Business is established through an entrepreneur's own decision with legal formalities, while employment is established through an appointment letter or service agreement.
The reward in business is profit which is uncertain and irregular, whereas in employment it is fixed salary or wages with little or no risk.
In business, transfer of interest is possible with certain formalities, but in employment, transfer of interest is not possible.

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Chapter business-trade-and-commerce: Business, Trade and Commerce | Short Questions

Why is business considered an economic activity?

What is meant by 'uncertainty of return' as a characteristic of business?

Distinguish between speculative risk and pure risk in business.

What is Hundi? State any one of its types.

What are extractive industries? Give two examples.

What is the role of profit as an objective of business?

How does warehousing serve as an auxiliary to trade?

What is meant by genetic industries? Give two examples.

State any three human causes of business risk.

What is meant by 'market standing' as an objective of business?

How does transport serve as an auxiliary to trade?

Explain the concept of social responsibility as an objective of business.

State any three differences between business and employment.

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