Exam Question for Class 11 Business Studies Chapter 1 Business Trade and Commerce
Please refer to below Exam Question for Class 11 Business Studies Chapter 1 Business Trade and Commerce. These questions and answers have been prepared by expert Class 11 Business Studies teachers based on the latest NCERT Book for Class 11 Science and examination guidelines issued by CBSE, NCERT, and KVS. We have provided Class 11 Business Studies exam questions for all chapters in your textbooks. You will be able to easily learn problems and solutions which are expected to come in the upcoming class tests and exams for standard 10th.
Chapter 1 Business Trade and Commerce Class 11 Business Studies Exam Question
All questions and answers provided below for Exam Question Class 11 Business Studies Chapter 1 Business Trade and Commerce are very important and should be revised daily.
Exam Question Class 11 Business Studies Chapter 1 Business Trade and Commerce
Short Answer Type Questions
Question. What are the causes for the possibility of inadequate profits due to uncertainties or unexpected events?
No business is risk free in the light of this statement, explain the concept of business risk and it’s any three causes.
Answer : Business Risks refers to possibility of inadequate profits or even losses due to uncertainties or unexpected events.
The causes of Business Risks are:
Question. What is business risk?
Answer : Business Risk refers to possibility of inadequate profits or even losses due to uncertainties or unexpected events.
Nature of Business Risk
♦ It arises due to uncertainties and unexpected events
♦ It is essential part of business
♦ Degree of risk taken depends on the nature and size of business
♦ Profit is reward for risk taking
Question. Define commerce, why is it of great importance in modern life?
Answer : According to James Stephenson, ’Commerce is an organized system for exchange of goods between members of the industrial world’
Importance of Commerce are as follows:
1. Commerce tries to satisfy increasing human wants
2. Commerce links producers and consumers
3. It creates employment opportunities
4. It helps in expansion of aids to trade
5. It helps in the growth of industrial development
6. It increases the standard of living
7. It encourages International trade
8. It helps during emergencies like flood, earthquake etc by making available essential requirement and relief to affected areas
Question. “Business is an institution organized to provide goods and services under the incentive of private gain.” Discuss.
Define business. Explain the characteristics of business (any three)
Answer : According to B.O.Wheeler, ‘Business is an institution organized and operated to provide goods and services under the incentive of private gain’
Business refers to occupation in which people engage in activities of purchase, production or sale of
goods and services with a view to earn profit
Characteristics of Business are:
1. Sale or exchange of goods and services
• Business involves transfer or exchange of goods and services for value.
• Cooking food at home for the family is not business but cooking food and selling it to others in a restaurant is business.
2. Dealings in goods and services on a regular basis
• Business involves dealings in goods or services on a regular basis.
• One single transaction of sale or purchase, therefore, does not constitute business
3. Profit earning
• No business can survive for long without profit.
• That is why, businessmen make all possible efforts to maximise profits, by increasing the volume of sales or reducing costs.
Question. “Commerce comprises of trade and all the services that make trade possible.” Discuss.
Answer : Commerce is the fundamental action that takes place in every transaction involving money and/or trade Commerce is classified as Trade and Auxiliaries to Trade
Trade means buying and selling of goods and services
Auxiliaries to trade means service which facilitates or assist trade
Question. Starters of a new business are largely responsible for the success of the business they undertake various functions. Discuss the basic factors which influence the starter functions.
Explain any six factors that are important to be considered while starting a business.
Question. ‘Kodak Pics’ is an advertisement agency initiated by Rahul, Sushmita & Prema. They have called a meeting to discuss the below given points
(i) Increase the profit margin by 20% in july.
(ii) Aiming bigger share in the market.
(ii) Making use of better lenses & improved techniques.
(iv)Making best use of cameramen, finance etc. employed by the business
(v) Improve efficiency in functioning of business.
(a)Which aspects of business objectives are being referred to here?
(b)Also develop each point to be discussed in the meeting by classifying the objective.
a) Economic objectives of the business are emphasized in the above points
b) Increase the profit margin by 20% in July: Profit earning objective is emphasized. Profitability refers to profit in relation to capital investment. Profit earning is important for business survival and growth
Aiming bigger share in the market: Market standing objective is emphasized. Market standing refers to the position of an enterprise in relation to its competitors. A business enterprise must aim at standing on stronger footing in terms of offering competitive products to its customers and serving them to their satisfaction.
Making use of better lenses & improved techniques: Innovation objective is emphasized. Innovation is the introduction of new ideas or methods in the way something is done or made. There are two kinds of innovation in every business i.e.,
(i) innovation in product or services; and
(ii) innovation in various skills and activities needed to supply products and services Making best use of cameramen, finance etc. employed by the business: Physical and Financial
resources objective is emphasized. Any business requires physical resources, like plants, machines, offices, etc., and financial resources, i.e., funds to be able to produce and supply goods and services to its customers. The business enterprise must aim at acquiring these resources according to their requirements and use them efficiently Improve efficiency in functioning of business: Productivity objective is emphasized. Productivity is ascertained by comparing the value of output with the value of inputs. It is used as a measure of efficiency. In order to ensure continuous survival and progress, every enterprise must aim at greater productivity through the best use of available resources
Question. Different situations in different business are being elaborated below:
(i)Raghunath Gorkha had a match stick factory in Nepal which got distructed by the recent earthquake.
(ii)Mr Arya, a senior manager in a telecom company shared confidential information about the company with a competitor which led to huge losses for the company.
(iii)Vodafone Co. was charged with evasion of tax and asked to pay fine in cross which would lead to heavy losses for the company.
(iv) Type writers becoming redundant is being referred to in all the above cases?
(a)Which characteristic of business is being referred to in all the above cases
(b)How can you classify the different cases based on this characteristic?
[Hint: Business Risks – Causes]
a) Risk bearing characteristic of business is referred to in all above cases. All business activities carry some elements of risk because future is uncertain and business has no control over several factors like, strikes, fire, theft, change in consumer taste etc. Every business invests money with the objective of earning profit but the amount of profit earned may very also there is always a possibility of losses.
b) (i)Raghunath Gorkha had a match stick factory in Nepal which got distructed by the recent earthquake:
It is classified as Natural Causes of Business risks. Human beings have little control over natural calamities like flood, earthquake, famine etc. They result in heavy losses of life, property & income in business.
(ii)Mr Arya, a senior manager in a telecom company shared confidential information about the company with a competitor which led to huge losses for the company:
It is classified as Human Causes of Business Risks. Human causes include such unexpected events like dishonesty, carelessness or negligence of employees, strikes, riots, management ineffeciency etc. Here he shared confidential information with competitor which led to huge losses
(iii)Vodafone Co. was charged with evasion of tax and asked to pay fine in cross which would lead to heavy losses for the company:
It is classified as Human Causes of Business Risks. It include unexpected events, like dishonesty, carelessness or negligence of employees, stoppage of work due to power failure, strikes, riots, management inefficiency etc which leads to heavy losses to company.
(iv) Type writers becoming redundant:
It is classified as Economic causes of business riskes. They are related to a chance of loss due to change in market condition e.g., fluctuations in demand and prices, competition, change in technology etc.
Typewriter became redundant is change in technology which leads to loss in company.
Question. Zainab, Shelly & Ravina are friends. They have just completed a fashion designing course. They wish to start a business together. They have Rs.10,00,000 savings put together and are planning to take a bank loan of additional _ 10 lakhs. They have found a prime location in KarolBagh where they can set their boutique. They decide that they will initially not take very big orders. Based on this information, quote the lines associated with factors affecting the decision to start a business and classify them.
1. Selection of line of Business: They selected to start a boutique in Karol Bagh
2. Size of Firm : They wanted to start business on small scale. Therefore the risk factor is less and capital requirement can also be met.
3. Choice of form of ownership: The choice of the suitable form of ownership will depend on such factors as the line of business, capital requirements, liability of owners, division of profit, legal
formalities, continuity of business etc. Here choice of form of ownership is partnership. They have to decide about the liability, division pf profit. They need to sign partnership deed
4. Location: Choice of location should be done based on the availability of raw material and labour, transportation and communication. Karol Bagh is the prime location as well as wholesale market. So, the choice of place is correct.
5. Finance: As they are bringing Rs 10 lac into business and taking an equal amount of loan to run the business.
6. Physical Facilities: They need to buy machine, equipment to start the business.
7. Layout: They need to draw a layout plan showing the arrangement of the facilities, so, as to haveefficient use of resources
8. Competent Workforrce: They need to have competent and committed workforce to perform the activities so that desired output is achieved.
9. Tax Planning: There are number of Tax laws which need to be taken into consideration before starting a business.
10. Start up: Now after taken into consideration the above point and checking the feasiability of the project, they can start with the launch of the boutique.