CBSE Class 11 Business Studies Nature and Purpose Of Business MCQs Set 04

Question: Which of the following is not a characteristic of business?
a) Production
b) Exchange or sale
c) Wages or salaries
d) Risk element
Answer: c

Question: Which of the following is an instrument of exchange, which was prominent in the subcontinent?
a) Copper
b) Hundi
c) Gold
d) Silver
Answer: b

Question: The amount of loss or damage and compensation for injury can be recovered by using which auxiliary to trade
a) Advertising
b) Premium
c) Insurance
d) Policy
Answer: c

Question: The industries which provide support services to other industries are known as
a) Primary industries
b) Commercial industries
c) Tertiary industries
d) Secondary industries
Answer: c

Question: Business risk is not likely to arise due to
a) Power failure
b) Employee dishonesty
c) Changes in government policy
d) Good management
Answer: d

Question: The position of an enterprise in relation to its competitors termed as
a) Market survival
b) Growth
c) Market Standing
d) None of the options
Answer: c

Question: Which auxiliary to trade bridges the time gap between production and consumption?
a) Advertising
b) Banking
c) Insurance
d) Ware housing
Answer: d

Question: __________ is an economic activity
a) Non-employment
b) Employment
c) Non profit organisation
d) None of the options
Answer: b

Question: Which of the broad categories of industries covers oil refinery and sugar mills?
a) Primary
b) Secondary
c) Tertiary
d) None of the options
Answer: b

Question: Which of the following is an economic activity?
a) Social Activities
b) Patriotic Activities
c) Profession
d) Religious Activities
Answer: c

Question: Why a business should earn a profit?
a) To provide a return to investors
b) To increase the reputation of the business
c) To provide funds for future growth
d) All of the options
Answer: d

Question: Which of the following is not a natural cause of business risks?
a) Earthquake
b) Strikes
c) Famine
d) Heavy Rains
Answer: b

Question: Recognise the assembling industry out of these-
a) Poultry, cattle farms
b) Cement, brick
c) Sugar, cotton
d) Television, computer
Answer: d

Question: Name the occupation in which people work for others in return for wages or salaries?
a) Employment
b) Business
c) Profession
d) None of the options
Answer: a

Question: Tea is mainly produced in Assam; Cotton in Gujarat and Maharashtra; Jute in West Bengal and Orissa; Sugar in U. P, Bihar, and Maharashtra. But these goods are required for consumption in different parts of the country. For this purpose ________ is very important.
a) Banking and Finance
b) Advertising
c) Insurance
d) Transport and Communication
Answer: d

Question: Which one of the following is NOT the objective of the business?
a) Investment
b) Innovation
c) Creation of customers
d) Profit-making
Answer: a

Question: The obligation of business firms to contribute for society and work for it refers to
a) Social responsibility
b) Human responsibility
c) Company responsibility
d) None of the options
Answer: a

Question: Identify the activity which is not an auxiliary to trade?
a) Banking
b) Warehousing
c) Insurance
d) Mining
Answer: d

Question: Which of the following comes under economic causes of risk-?
a) Flood, famine
b) Negligence of workers, stoppage of work
c) Demand for goods, competition
d) None of the options
Answer: c

Question: “Greater the risk involved in a business, higher is the chance of profit”. This statement is true or false.
a) True
b) False
c) Can’t Say
d) None of the options
Answer: a

Question: Which one of the following is an economic activity in which specialized knowledge is required?
a) Profession
b) Business
c) Employment
d) None of the options
Answer: a

Question: Bad debts due to non-payment of debts by debtors is an example of which type of business risk?
a) Human
b) Natural
c) Physical
d) Economic
Answer: a

Question: Commerce includes activities relating to trade and _________________ to trade.
a) Auxiliaries
b) Subsidiaries
c) Supporting
d) None of the options
Answer: a

Question: Support services to industrial \business activities are clubbed under?
a) Commercial industries
b) Primary industries
c) Secondary industries
d) Tertiary industries
Answer: d

Question: Mr. Y told Mr. T that for business we need physical resources. Identify the physical resources given below-
a) Bank
b) Warehouse
c) Plant & machinery
d) None of the options
Answer: c

Question: Bad debts due to non-payment of debt by the debtor are an example of which type of business risk?
a) Human
b) Natural
c) Physical
d) Economic
Answer: a

Question: Which of the following is not concerned with the profession?
a) Manufacturing goods and services
b) Specialised body of knowledge and skill
c) Code of conduct
d) Formal Training
Answer: a

Question: The process of exchanging ideas, information by speaking, writing or etc. is termed as
a) Sender
b) Medium
c) Communication
d) None of the options
Answer: c

Question: The lack of knowledge about what is going to happen in the future is
a) Risk
b) Uncertainty
c) Both of the above
d) None of the options
Answer: b

Question: Which of the following is an economic cause of business risks?
a) Demand for goods
b) Competition
c) Price
d) All of the options
Answer: d

Question: Industries like sugar mill or oil refinery are put under which category-
a) Primary
b) Secondary
c) Tertiary
d) None of the options
Answer: b

Fill in the blanks:

Question: Obligation of business firm to contribute resource for solving social problem and work in a desirable manner is called _________ .
Answer: social responsibility

Question: The auxiliary to trade which provides vital information about goods and services to customers is called _________.
Answer: advertising

Question: Business risks refers to the possibility of inadequate profits or even losses due to _________ or unexpected events.
Answer: uncertainties

Question: It is generally believed that business activity is carried out for _________
Answer: Profit

Question: Guild Merchants undertook the task of building temples and made donations by levying a _________ Tax on their members.
Answer: Corporate

True / False:

Question: Secondary industries process such material to produce goods for final consumption by other industrial units
Answer: True

Question: The first five year plan was implemented in the year 1950.
Answer: False

Question: Transport is removing hindrance of funds.
Answer: False

Question: Greater the risk involved in a business , higher is the choice of profit.
Answer: True

Question: Extraction industries draw products from natural resources
Answer: True


Match the following:

Question: Relate the following items with the concept written below:
           A                                             B
1. Services to trade             a) buying and selling of goods and activities required to do
                                                 this process
2. Entrepot trade                 b) one of the type of foreign trade
3. Communication               c) transportation, advertising etc.
4. Commerce                      d) helps in exchange of information
                                            e) Removes hindrance of time
Answer: 1-c, 2-b, 3-d, 4-a

Question: Join the following services to trade with the examples given:
          A                                          B
1. Transport                       a) bharti Airtel
2. Communication             b) haryana Roadways
3. Finance                         c) ICICI IDBI
4. Insurance                      d) oriental Insurance Company Limited
                                          e) Bhakti Storage house
Answer: 1-b, 2-a, 3-c, 4-d

Question: Match the following terms with the options given describing them:
        A                                                      B
1. Commerce                                     a) removes hindrance of storage and information
2. Trade                                             b) buying and selling of goods and services
3. Warehousing and Advertising       c) includes import export and and report
4. Foreign trade                                d) trade and auxiliaries to trade
                                                         e) buying and selling of goods
Answer: 1-d, 2-e, 3-a, 4-c

Question: Join the following services to trade with the hindrances which they remove:
        A                                   B
1. Transport                a) information
2. Insurance               b) storage
3. warehousing          c) place
4. advertising             d) person
                                  e) risk
Answer: 1-c, 2-e, 3-b, 4-a

Pictorial Questions:

Question: Identify the causes of Business Risk in each of the following pictures.

Answer: Natural Cause

Question: Identify the type of Internal trade in the given image:

Answer: Wholesale trade

Question: Identify the causes of Business Risk in each of the following pictures.

Answer: Human Cause

Question: Identify the causes of Business Risk in each of the following pictures.

Answer: Economic Cause

One word Answer type Questions :

Question: Why do we insure goods?
Answer: We insure goods in order to minimise the risk of loss. Goods may be damaged or destroyed by fire, theft and natural calamities in the process of transport and storage. Insurance protects against such loss.

Question: Mention any two categories of manufacturing industries.
Answer: a) Processing industry. b) Assembling industry.

Question: Give any two examples of genetic industries.
Answer: a) Dairy farming. b) Animal husbandry.

Question: Name the industry which is concerned with extraction of natural resources and reproduction of living organisms.
Answer: Primary industry.

Question: Mention the two types of human activities.
Answer: a) Non-economic activities. b) Economic activities.

Question: Mining of iron ore is an example of which industry?
Answer: Primary industry.

Question: Name the industries which provide various support services to primary and secondary industries.
Answer: Tertiary industries.

Question: Name the economic activity which involves specialised knowledge and in which entry is restricted.
Answer: Profession.

Question. Can fishing be contemplated as a primary industry?
Answer: Yes.

Question. Name one economic pursuit, in which expertise is required.
Answer: Profession is an economic pursuit, in which expertise is required.

Question. Sort the following into a business concern, employment and profession.
- Farmer
- Clerk
- Lawyer
- Doctor
Answer:  - Farmer – Business
- Clerk – Employment
- Lawyer – Profession
- Doctor – Profession

Question. What is the difference between Business and Profession?
Answer: 
Business Profession
In the business, capital investment is necessary according to the size and nature of the business. In the profession, limited capital is required for the establishment of the business enterprise.

Here, profits are uncertain. Here, the risk factor is not to that extent.

Question. Under which type of industry do oil refinery and sugar mills are classified?
Answer:  Secondary industry

Question. What are the different types of economic activities?
Answer:  There are various types of economic activities. Namely,
- Profession
- Business
- Employment

Question. How does a trader get rid of the hindrance of a person?
Answer: - Getting rid of hindrance of a person by making the commodities obtainable to the customers from the manufacturers via trade.
- Transportation removes hindrance of a location by transporting the commodities from the place of manufacturing to the market place for selling purpose.
- However, insurance removes the hindrance of perils of loss or damage of commodities due to dire, theft and accidents etc.,
- Advertising removes the hindrance of the data by keeping the customers informed regarding the commodities and services that are obtainable in the market place.

Question. What are the objectives of a business?
Answer:  Objectives of business are mentioned below:
- Innovation: Every business concern must come up with novice ideas, inventions and implement them; which are helpful for survival and growth.
- Productivity: Productivity is certainly determined by contrasting the value of the output with the value of the input.
- Earning Profits: Any business entity that is operating must earn a reasonable amount of profits in order to sustain survival and growth.