CBSE Class 11 Business Studies Small Business Assignment

Mcq Questions for Ncert Class 11 Business Studies MSME and Business Entrepreneurship

• Gist of the Lesson
Role of small scale industries in socio economic development of India
• Employment generation
• Output generation
• Export promotion
• Balance regional development
• Development of entrepreneurship
• Complementary to large scale industries

Role of small scale industries in rural India
• Generation of employment in rural areas
• Multiple source of income
• Prevent migration
• Mobilization of local resources
• Rural industrialization
• Reduction in income inequalities
• Equitable distribution of national income

Problems of small scale industries
• Finance
• Management skills
• Marketing
• Quality
• Under utilization of capacity
• Raw materials
• Labor
• Technology
• Global competition

Measures taken by the government
• Protective measures
• Credit and finance
• Marketing assistance
• Incentives
• Institutional support

Question. The main objective of entrepreneurship development is to
(a) to increase literacy
(b) to increase number of entrepreneurs
(c) to increase GDP
(d) All of the above 

Answer : B

Question. Sundeep is individual with surplus cash and interested to invest in upcoming start-ups. Which method is suitable for him?
(a) Crowd funding
(b) Venture capital
(c) Boot strapping
(d) Angel investment

Answer : A

Question. Literary work is protected under
(a) Patent
(b) Trademark
(c) Copyright
(d) Crowd funding

Answer : C

Question. M/s XYZ a small scale enterprise has following investments in its business 

Research and development cost ₹ 3 lakh Plant and machinery ₹ 8 lakh Factory shed ₹ 5 lakh Industrial safety equipments ₹ 3 lakh Land ₹ 10 lakh Decide the category to which M/s XYZ belongs?
(a) micro enterprise
(b) small enterprise
(c) medium enterprise
(d) cottage industry

Answer : A

Question. ……… is the funding a project by raising money from a large number of people for a common goal.
(a) Boot strapping
(b) Crowdsourcing
(c) Venture capitals
(d) Angel investments

Answer : B

Question. Statement I Small industries are able to maintain good personal relations with customers.
Statement II Small scale industries suffer from lack of adequate working capital.
Alternatives
(a) Statement I is correct and Statement II is wrong
(b) Statement II is correct and Statement I is wrong
(c) Both the statements are correct
(d) Both the statements are incorrect

Answer : C

Question. Statement I The purpose of geographical indications is to encourage innovation in manufacturing field.
Statement II Certification mark certifies the quality of product.
Alternatives
(a) Statement I is correct and Statement II is wrong
(b) Statement II is correct and Statement I is wrong
(c) Both the statements are correct
(d) Both the statements are incorrect 

Answer : B

Question. Entrepreneurship development leads to the establishment of industries. This helps in …. .
(a) capital formation
(b) economic growth
(c) Both (a) and (b)
(d) None of these 

Answer : C

Assertion–Reasoning MCQs :

Question. Assertion (A) Entrepreneurship development helps in capital formation of country.
Reason (R) Entrepreneurs develop and produce substituted products of imported goods and prevent the over-dependence on the other countries.
(a) Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion (A)
(b) Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of Assertion (A)
(c) Assertion (A) is true, but Reason (R) is false
(d) Assertion (A) is false, but Reason (R) is true

Answer : B

Question. Assertion (A) Small scale industries enjoy the advantage of low cost of production.
Reason (R) The establishment and running cost of small-scale industries are minimum. Locally available resources are less expensive.
(a) Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion (A)
(b) Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of Assertion (A)
(c) Assertion (A) is true, but Reason (R) is false
(d) Assertion (A) is false, but Reason (R) is true

Answer : A

Question. Assertion (A) Small scale industries capture the opportunity at the right time by saving time correctly.
Reason (R) Small scale industries are small in size, which allows them to take quick decisions.
(a) Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion (A)
(b) Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of Assertion (A)
(c) Assertion (A) is true, but Reason (R) is false
(d) Assertion (A) is false, but Reason (R) is true

Answer : A

Question. Assertion (A) Entrepreneurship development is considered as a continuous process.
Reason (R) Entrepreneurship development involves learning which is a never-ending process.
(a) Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion (A)
(b) Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of Assertion (A)
(c) Assertion (A) is true, but Reason (R) is false
(d) Assertion (A) is false, but Reason (R) is true

Answer : A

Question. Assertion (A) Small scale industries can be opened anywhere in the country, without any locational constraints and the benefits of industrialisation can be reoped by every region.
Reason (R) The latent skills and talents of people can be channelled into business ideas, which can be converted into reality with little or nil capital investment anywhere.
(a) Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion (A)
(b) Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of Assertion (A)
(c) Assertion (A) is true, but Reason (R) is false
(d) Assertion (A) is false, but Reason (R) is true

Answer : C

Question. Assertion (A) Entrepreneurship development helps in generating employment opportunities.
Reason (R) Entrepreneurship development enables the economy to utilise and explore the abundant of natural resources.
(a) Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion (A)
(b) Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of Assertion (A)
(c) Assertion (A) is true, but Reason (R) is false
(d) Assertion (A) is false, but Reason (R) is true

Answer : B

Question. Assertion (A) The industrial units for whom the output ismanufactured are referred to as ‘main units’. 
Reason (R) Ancillary small industrial unit manufactures parts, components, sub-assemblies, tools or intermediate products for other industrial units.
(a) Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion (A)
(b) Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of Assertion (A)
(c) Assertion (A) is true, but Reason (R) is false
(d) Assertion (A) is false, but Reason (R) is true

Answer : D

Case Based MCQs :

Three friends, after completing their graduation, decided to open their own business and to create employment opportunities for others too. After their meeting with the manager of DIC, they attended entrepreneurship development programme. As a result of their entrepreneurship, Zayka Food Industries is created and operated successfully by them.
To create a feeling of belongingness in the customers and for branding purposes, they started to use ‘hat’ as a symbol on all their products. Soon, this become an intellectual property for the company. After getting a good response in the market, now one of them is planning to set up a new unit “Laajwaab Foods and Beverages Industry” in rural area ofOdisha and opted for labour intensive technique, due to easy availability of cheap labour.
The finance manager has estimated the investment of ₹ 2 crore to acquire plant and machinery and ₹ 80 lakhs for meeting operating expenses of this new unit. The company did not want to dilute the ownership and did not want any interference from investors/lenders. Also, it expects good cash flow return from the new unit.
For arrangement of finance and availing professional services that facilitates the development of new business, they approached a body which is located in their universities.

Question. The finance manager has estimated the investment of ₹ 2 crore to acquire plant and machinery and ₹ 80 lakh for meeting operating expenses of this new unit. The company did not want to dilute the ownership and did not want any interference from investors/lenders. Also, it expects good cash flow return from the new unit. Which form of capital would be better for the company?
(a) Equity capital
(b) Long-term loans
(c) Preference capital
(d) Loans fromcommercial bank

Answer : B

Question. Post-training stage of ED programme does not include
(a) Management Skill Development
(b) Guidance in Project Implementation
(c) Sustaining Motivation
(d) Providing-follow up

Answer : A

Question. “For arrangement of finance and availing professional services that facilitates the development of new business, they approached a body which is located in their universities.’’ Which way to fund start-up is highlighted here?
(a) Accelerators
(b) Incubators
(c) Private equity
(d) Venture capital

Answer : B

Question. “To create a feeling of belongingness in the customers and for branding purposes, they started to use ‘hat’ as a symbol on all their products.” Which IPR is highlighted in the line?
(a) Patents
(b) Copyrights
(c) Trademarks
(d) Trade secrets

Answer : C

Question. Which category of SSI, ‘‘Lajawaab Foods and Beverage Industries’’ belongs to?
(a) Micro enterprises
(b) Small enterprises
(c) Medium enterprises
(d) Cottage industry

Answer : B

Question. Which of the following is not a feature of entrepreneurship?
(a) Systematic activity
(b) Risk element
(c) Profession
(d) Dynamic process

Answer : C

Important Mcq Questions for Ncert Class 11 Business Studies MSME and Business Entrepreneurship

Short Answer Type Questions :

Question. What are some of the key action points of Start India Initiative?
Answer: Action points of Start India Initiatives are as follows (any three)
(i) Simplification and Handholding In order to make compliance for startups, friendly and flexible, simplifications are announced. Government of India has launched a mobile app and a website for easy online registration.
(ii) Startup India Hub The objective is to create a single point of contact for the entire startup ecosystem and enable knowledge exchange and access to funding. Start-up India Hub will be key stakeholder of entrepreneurs. It will be their friend, mentor and guide to hold their hand.
(iii) Legal Support and Fast-tracking Patent Examination The scheme for Startups Intellectual Property Protections (SIPP) is envisaged to facilitate protection of patents, trademarks and designs of innovative and interested startups.
(iv) Easy Exit In the event of a business failure and wind up of operations, procedures are being adopted to reallocate capital and resources towards more productive avenues. This will promote experimentation with new and innovative ideas, without fearing complex and long drawn exit process. A start-up can close its business within 90 days from the date of application of winding up.

Question. What are the three types of enterprises with respect to manufacturing?
Answer: The three types of enterprises with respect to manufacturing are
(i) Micro Enterprise In micro enterprise, the investment in plant and machinery does not exceed ₹ 25 lakh.
(ii) Small Enterprise In small enterprise, the investment in plant and machinery is more than ₹ 25 lakh but does not exceed ₹ 5 crore.
(iii) Medium Enterprise In medium enterprise, the investment in plant and machinery is more than ₹ 5 crore but does not exceed ₹ 10 crore.

Question. ST foods Inc is a company preparing Rajasthani food. The company has 23 outlets in Rajasthan andGujarat. The company prepares its foods with recipes unique to it and uniform across outlets. These recipes have been the driving force of business and are not known to general public. Identify and explain the intellectual property right discussed.
Answer: The IPR discussed is trade secret. It is an information that
(i) is not generally known to public.
(ii) confers economic benefit.
(iii) is the subject of reasonable efforts by the holder to maintain its secrecy. For example CoCa Cola’s recipe is trade secret. KFC keep secret ingredients in its recipe.
(iv) is protected without any procedural formalities for an unlimited period.

Question. Highlight the importance of small scale industries in Indian employment and GDP context.
Answer: Following points highlight the importance of SSIs in Indian employment and GDP
(i) Contribution in GDP Small industries in India account for 95% of the industrial units of the country. They contribute almost 40% of the gross industrial value added and 45% of the total exports (direct and indirect) from India.
(ii) Employment Generation In India, small industries are the second largest employers of human resources, after agriculture. They generate more employment opportunities per unit of capital invested as compared to large industries. Thus, they are considered good for countries like India, that have surplus labour and less capital.

Question. What are the different forms of support offered to small industries by the government?
Answer: Forms of support offered to small industries by the government are
(i) Institutional support in respect of credit facilities. 
(ii) Provision of developed sites for construction of sheds.
(iii) Provision of training facilities.
(iv) Supply of machinery on hire export marketing.
(v) Technical and financial assistance for technological upgradation.
(vi) Special incentives for setting up of enterprises in backward areas.

Question. Chris and Craig were having a discussion about entrepreneurship development. Chris suggested that there were no pre-requisites for entrepreneurship development whereas Craig suggested that there are some pre-requisites. Who – Chris or Craig is correct? Explain.
Answer: Craig is correct because there are some pre-requisites for entrepreneurship development. Following are the pre-requisites
(i) Intelligence
(ii) Motivation
(iii) Knowledge
(iv) Sustained efforts
(v) Human factor
(vi) Government assistance/Grant
(vii) Opportunity
(viii) Industrial technology