Check important questions and answers of CBSE Class 11 Business Studies (Chapter 1: Business, Trade & Commerce ). Most of the questions and answers provided here are based on the NCERT textbook and latest CBSE Class 11 Business Studies Syllabus 2020. These questions and answers are very important for the preparation of the upcoming CBSE Class 11 Business Studies exam 2020.
CBSE Class 11 Business Studies class 11 chapter 1 Business, Trade and Commerce: Important Questions and Answers
Q 1- Explain the different kinds of economic activities.
Ans- The different kinds of economic activities are mentioned below:
Profession- It can be defined as an occupation that requires knowledge of the specific field. Professions differ from each other in terms of skills required and the knowledge that you have.
Business- It is trading all kinds of goods and services with the purpose of earning profit.
Employment- In this, an organization hires people with the purpose of achieving a common goal and pays the monthly salary in return for their services. Employees are hired to work on a regular basis on the basis of their skills for a particular job. Apart from the monetary benefits, the organization also gives non-monetary benefits such as allowances, etc.
Q 2- Explain briefly the objectives of the business.
Ans- The objectives of the business can be described in three manners:
Innovative- The most important objective of any business is innovation. Generation of new ideas gives way to business, its policies and helps in accomplishing goals.
Productivity- For the business to flourish, it is important to have productivity. It can be measured by comparing the value of output with the value of the input.
Profits- The purpose of any business is to earn a profit. The increase in the percentage of profits indicated the positive growth of a business.
Q 3- Name the industries which give support to other industries.
Ans- Tertiary industry is known for furnishing support to the primary and secondary industries.
Q 4- What is the meaning of Maritime Trade.
Ans- Maritime trade refers to the trading and shipping of goods through water bodies, particularly sea. This form of trade was preferred during ancient times.
Q 5- What are the factors that must be considered while starting a business? Discuss.
While starting a business, the owner must consider various kinds of factors. Apart from the capital and resources, there are other factors like consumer demand or location. Both the positive and negative factors must be taken into consideration. Check some of the important factors which she or he should evaluate while starting a business:
- Location- While setting up a business, location is one factor that must be taken into consideration. It is important that the chosen location has the required raw materials, resources and infrastructure. The success of the business also depends on the demand for the product in that location.
- Efficient Workforce- It is important that the workforce involved in the business has the required skill and knowledge. The success of a business depends on the shared vision of both the owner and employees. It must be noted that the people appointed on both the managerial and worker level suits the position.
- Finance- One of the most prominent factors of any business is finance. Apart from the capital invested, the day to day financial requirements are also important to run a smooth business. There must be sufficient financial resources at the time of the crises.
- Selection of Business- Choosing the line of a business depends on the required technical knowledge of the entrepreneur. Apart from that what will be future market demand of the product, availability of resources, profit is some of the things to be considered while selecting the business line.
Q 6- Explain briefly why Insurance is known as a tertiary industry.
Ans- Insurance is an important support service for both the Primary and Secondary Industries. Tertiary industries are the ones that give services to different types of organizations and industries. It helps them bloom and make them more connected to the consumers.
Q 7- Explain the importance of profit in business.
Ans- The start of a business is with the sole purpose of earning profit. The increase in income impacts the future growth of the business as well, as part of that profit is invested in the business. The percentage of profit indicates that the growth of the business is in the right direction. Earning profit is important for any business, indicating that policies and strategies are working in the right direction.
Q 8- Which were the major exports and imports in ancient India?
Ans- The major exported products in ancient India were indigo, opium, wheat, sugar, spices, cotton, etc. It also included animal products such as skins, tortoise, shells, crystals, sapphires, etc.
The imported products at the time of ancient India comprised of gold, animal products, horses, tin, copper, lead, glass, flax and linen, Chinese silk, etc.
Q 9- What is Industry? Explain its types by giving examples.
Ans- Industry is defined as an economic activity that involves the conversion of raw material into useful goods. This term is used for the firms producing similar products in abundance.
There are various types of industries:
Primary Industry- This industry involves the procurement of raw materials. The primary industry involves the processing and extraction of natural resources as their raw material and then convert them into a consumable form. The examples of the Primary industry are Mining, Fishing, Agriculture, etc.
Secondary Industry- They are also called manufacturing industries that take raw materials. After furnishing and adding value to them, the secondary industry converts them to the final product which can be consumed by the customer. It can be further classified as the manufacturing and construction industries as well.
Tertiary Industry- This industry is the backbone of both the Primary and Secondary industries. The tertiary industry facilitates the smooth functioning of both industries. Known as a service provider, the tertiary industry includes the communication sector, transport sector. Some of the important examples of the tertiary industry also involve banking, credit facilities, etc.
Q 10- What is commerce?
Ans- Commerce means the control of the business. It involves the trading of different commodities, services. It is an important part of the business that involves exchanging items of value and services among the entities or companies.
Q 11- Define the meaning of business.
Ans- The word business is derived from the word ‘busy’, meaning the person is engaged in an activity that earns him profit. The purpose of business is to involve in the trading of goods and services which is highly in demand and will increase in the profit of the businessman.
Q 12- What is Business? Mention at least 5 of its characteristics in detail.
Ans - Business is that economic activity which consists of trading goods and services with the purpose of earning profit in return. The increase of output from the invested input signifies the positive growth of a business.
The five main characteristics of the business are mentioned in the points below:
- The trading of goods and services with the purpose of earning profit is one of its main characteristics. The medium through which this exchange takes place is money.
- Any form of business involves obtaining raw materials including the semi-furnished goods which are then processed. The price of the goods is then determined through this value addition, making the cost of the final product and services a bit higher.
- One of the major characteristics of any business is to determine consumer behavior. It is always beneficial to understand the needs of the customer which will lead to an increase in demand. Satisfying the consumer’s needs must be the first motive of any business.
- Business risk is also one of the characteristics. The risk of business going insolvent is always involved as long as the trading of goods and services is taking place.
- The exchange of goods and services takes place on a regular basis. Procured raw materials are furnished which adds value and the final products are then traded in the market. It should be noted that the business involves multiple deals of transactions of the product in the market.
Q 13- What is Business Risk?
Ans- Business risk means the possibility of unexpected circumstances which might lead to the failure of the business. There can be many reasons involving the decrease in the demand for the product. It can be due to the change in consumer demand or changing economic situations.