Samacheer Kalvi Class 11 Commerce Solutions Chapter 2 Objectives of Business

Exercise

I. Choose the Correct Answer

Question 1. The Primary objective of a business is ................
(a) Making Profit
(b) Not Making Profit
(c) Special skill
(d) None of the options
Answer: (a) Making Profit
In simple words: The main goal of any business is to make money. All other goals usually help achieve this primary aim.

🎯 Exam Tip: Remember that while social responsibility is important, profit is the core objective for a business's survival and growth.

Question 2. Occupation of a Doctor is ................
(a) Employment
(b) Business
(c) Profession
(d) Sole Proprietor
Answer: (c) Profession
In simple words: A doctor's work is a profession because it needs special education, training, and follows a code of conduct.

🎯 Exam Tip: Distinguish between business (earning profit through trade), employment (working for wages), and profession (specialized skill with a code of conduct).

Question 3. The following does not characterize business activity?
(a) Production of goods and services
(b) Presence of Risk
(c) Sale or exchange of goods and services
(d) Salary or wages
Answer: (d) Salary or wages
In simple words: Getting a salary or wages is a sign of being employed, not of running a business. Business involves making or selling goods and services, and it always has risks.

🎯 Exam Tip: Business activities involve production, sale, and risk for profit, while salary/wages are characteristic of employment.

Question 4. Activities undertaken out of love and affection or with social service motive are termed as:
(a) Economic activities
(b) Monetary activities
(c) Non Economic Activities
(d) Financial Activities
Answer: (c) Non Economic Activities
In simple words: When people do things not to earn money but out of love, care, or for social good, these are called non-economic activities.

🎯 Exam Tip: The key difference between economic and non-economic activities is the motive: earning money versus personal satisfaction or social service.

II. Very Short Answer Questions

Question 1. Define Economic Activities.
Answer: Economic activities are those actions people take to earn money or make financial gains to support their lives. These activities help individuals and families meet their daily needs.
In simple words: Economic activities are things people do to earn money and make a living.

🎯 Exam Tip: Clearly state the two main aspects: earning money and for livelihood, in your definition.

Question 2. What do you mean by Business?
Answer: Business refers to any regular human activity that aims to make a profit through producing, distributing, selling, or buying goods and services. It is a systematic process of creating value for customers.
In simple words: Business is when people regularly make, buy, or sell things to make money.

🎯 Exam Tip: Include "regular basis" and "object to earn profit" as key phrases in your definition.

Question 3. Define Profession.
Answer: Professions are jobs that involve offering specialized personal services, usually requiring specific education and expert skills. It is more than just a job; it is a career for someone who is knowledgeable and competent in their chosen field. They often follow ethical rules set by their professional bodies.
In simple words: A profession is a job needing special skills and knowledge, like a doctor or lawyer. People in professions offer personal services and follow a set of rules.

🎯 Exam Tip: When defining "Profession", highlight the need for specialized knowledge, personal service, and adherence to a code of conduct.

Question 4. What do you mean by Employment?
Answer: Employment is a type of work where people labor for others and receive payment in the form of wages or salaries. This means they are working under an employer and get paid regularly for their service. For example, managers, clerks, bank officials, and factory workers are all in employment.
In simple words: Employment means working for someone else and getting paid a salary or wages for your work.

🎯 Exam Tip: Emphasize "working for others" and "remuneration in wages/salaries" to clearly define employment.

III. Short Answer Questions

Question 1. What do you mean by human activities? Explain.
Answer: Human activities are all the actions people perform to meet their needs, fulfill their desires, or achieve personal satisfaction. These activities are broad and can be grouped into two main types: economic activities and non-economic activities. The type of activity depends on whether the main goal is to earn money or not.
In simple words: Human activities are everything people do to get what they want or need, or just for their own happiness. They can be for money or not for money.

🎯 Exam Tip: Start with a clear definition and then mention the two main categories (economic and non-economic) as an explanation.

Question 2. Write short notes on:
(a) Business
(b) Profession
Answer:
(a) Business: Business is any ongoing human activity aimed at making a profit. This profit is earned through the creation, distribution, buying, or selling of goods and services. Businesses are also involved in getting raw materials, making products, or processing them. They can be grouped by their size, who owns them, and what they do. This activity is crucial for a country's economy.
(b) Profession: A profession is a job that involves providing specialized personal services. People in professions need specific education, training, and expert skills in their field. It is a career where individuals are highly skilled and follow rules or codes of conduct set by professional groups. Professionals earn money by charging fees for their specialized services.
In simple words: Business is about making or selling things to earn money. Profession is about using special skills and knowledge to offer services for a fee, following certain rules.

🎯 Exam Tip: For short notes, define each term clearly and highlight 2-3 distinguishing characteristics or examples for each.

Question 3. Explain the concept of 'Business'.
Answer: Business refers to any human activity carried out regularly with the goal of earning profit. This involves making, distributing, selling, or buying goods and services. Business operations are linked to producing or processing goods. Industries often create useful forms of goods by converting raw materials into products that are helpful for either further production or direct use by consumers. This process adds value to materials.
In simple words: Business is doing things regularly, like making or selling goods, to earn a profit. It helps turn raw materials into useful products for people.

🎯 Exam Tip: Make sure to mention "regularity," "profit motive," and the flow of "goods and services" as key elements of business.

Question 4. Briefly state the human objectives of a business.
Answer: The human objectives of a business focus on the well-being and happiness of its employees and other people. This includes meeting the expectations of staff, helping individuals who are disabled or disadvantaged, and providing proper education and training. It covers ensuring employees are economically secure, feel socially and mentally satisfied, and develop their skills and potential.
In simple words: Human objectives mean a business cares for its employees and others, like disabled people, by providing good work conditions, training, and overall happiness.

🎯 Exam Tip: Focus on the well-being of employees, training, and social responsibility when listing human objectives.

IV. Long Answer Questions

Question 1. Explain the characteristics of Business.
Answer: The main characteristics of a business are:
1. Production or Procurement of Goods: A business must either produce goods itself or buy them from others to fulfill human needs and wants. For example, a bakery produces bread, while a grocery store procures items from wholesalers.
2. Sale, Transfer, or Exchange: Business always involves the selling or exchanging of goods and services. If someone makes something only for their personal use, it is not considered a business. There must be a transaction with another party.
3. Dealing in Goods and Services: Businesses handle various goods, such as consumer goods (cloth, pens, brushes) or producer goods (machinery). They also provide services like electricity, water, banking, or insurance, which are intangible but meet needs.
4. Regularity of Dealings: For an activity to be a business, transactions must happen regularly, not just once. A single buying and selling action does not make it a business.
5. Profit Motive: A very important feature of business is the desire to earn profit. It is an economic activity that helps people make a living and grow their wealth.
6. Element of Risk: Every business involves a degree of uncertainty or risk. The expected profit is never guaranteed because it depends on many things beyond the owner's control, such as market changes or competition.
In simple words: Businesses produce or buy goods, sell them, deal in many kinds of products and services, do this regularly, aim for profit, and always have some risk involved.

🎯 Exam Tip: List at least five distinct characteristics and provide a brief explanation or example for each to score full marks.

Question 2. Compare business with profession and employment.
Answer: Business, profession, and employment are three important types of human economic activities that differ in their nature, establishment, and goals. The table below outlines these key distinctions.

🎯 Exam Tip: When comparing, create a table with clear points of difference. Focus on establishment, work nature, qualifications, motive, capital, reward, and risk.

Question 3. Discuss any five objectives of the business.
Answer: Businesses have multiple objectives that guide their operations and ensure their success and sustainability. Here are five important objectives:
1. Economic Objectives: The main economic goal of a business is to earn profit. To achieve this, a business must also create customers, innovate regularly, and use all available resources in the best possible way. Profit is necessary for survival and growth.
2. Social Objectives: Businesses are part of society, so they have a duty to contribute to society's welfare. They should produce quality goods, offer fair prices, create jobs, and ensure their activities benefit the community. This builds goodwill and trust.
3. Organizational Objectives: These objectives are what an organization aims to achieve as it grows. This includes expanding the business, modernizing its operations, providing high-quality goods to consumers, and ensuring customer satisfaction. These goals help the business thrive in the economy.
4. Human Objectives: These objectives focus on the well-being of the people involved with the business. This includes meeting the needs and expectations of employees, helping disabled or disadvantaged individuals, and providing proper education and training. It ensures a positive work environment and human resource development.
5. National Objectives: As an important part of the country's economy, businesses must work towards national goals and aspirations. This might include producing goods that support national development, contributing to economic stability, promoting local talent, and adhering to national policies.
In simple words: A business has many goals: making money (economic), helping society (social), growing and improving (organizational), taking care of its people (human), and supporting the country's goals (national).

🎯 Exam Tip: Categorize objectives clearly (Economic, Social, Organizational, Human, National) and provide a one-sentence explanation for each to show a comprehensive understanding.

Question 4. Distinguish between economic and non-economic activity.
Answer: Economic and non-economic activities are two fundamental categories of human actions, differentiated by their primary motive and outcome. Economic activities are typically driven by the desire for monetary gain, whereas non-economic activities are performed for personal satisfaction or social reasons. This table provides a clear comparison.

🎯 Exam Tip: Use a comparative table to clearly show differences across various parameters like motive, measurement, and outcome, providing a brief example for each.

11th Commerce Guide Objectives Of Business Additional Important Questions And Answers

Question 1. Human activities can be categorised into ................ types.
(a) One
(b) Two
(c) Three
(d) Four
Answer: (b) Two
In simple words: All the things people do can be put into two main groups.

🎯 Exam Tip: Remember the two main categories of human activities: economic and non-economic.

Question 2. Which of the following is not characterized as economic activities?
(a) Production of goods by the manufacturer
(b) Selling by retailers
(c) Medical advice rendered by a physician
(d) Celebrating festivals
Answer: (d) Celebrating festivals
In simple words: Celebrating festivals is for joy and culture, not for earning money, so it's not an economic activity.

🎯 Exam Tip: Economic activities always involve earning money or creating wealth, while non-economic activities are for personal satisfaction or cultural reasons.

Question 3. Occupations may be classified into ................ categories.
(a) One
(b) Two
(c) Three
(d) Four
Answer: (c) Three
In simple words: There are three main kinds of occupations people can have.

🎯 Exam Tip: Recall the three main occupational categories: business, profession, and employment.

Question 4. Occupation in which people work for others and get remuneration is known as ................
(a) Profession
(b) Business
(c) Exchange of services
(d) Employment
Answer: (d) Employment
In simple words: When someone works for another person or company and gets paid, that is called employment.

🎯 Exam Tip: The key indicator for employment is receiving wages or a salary in exchange for working for someone else.

Question 5. ................ refers to the occupation in which people work for others and get remuneration in the form of wages or salaries.
(a) Employment
(b) Profession
(c) Business
(d) Industry
Answer: (a) Employment
In simple words: Working for others and getting paid a salary or wages describes employment.

🎯 Exam Tip: This question tests the definition of employment directly; ensure you connect working for others with receiving wages/salaries.

Question 6. Economic activities performed for earning profits is known as ................
(a) Business
(b) Employment
(c) Profession
(d) Avocation
Answer: (a) Business
In simple words: Activities done specifically to make a profit are known as business.

🎯 Exam Tip: The core motive of earning profit is a defining characteristic of business activity.

Question 7. An enterprise which is owned, managed and controlled by Government and private entrepreneurs are known as ................
(a) Public Enterprise
(b) Private Enterprise
(c) Joint Enterprise
(d) Co-operative Society
Answer: (c) Joint Enterprise
In simple words: A business that is run by both the government and private owners together is called a joint enterprise.

🎯 Exam Tip: Understand that "joint" refers to collaboration, specifically between government and private entities in business ownership and management.

Question 8. Which one of the following is the example for Public Enterprises?
(a) State Trading Corporation (STC)
(b) Ramesh Bros
(c) Maruti Suzuki
(d) Sole Trader Concern
Answer: (a) State Trading Corporation (STC)
In simple words: The State Trading Corporation is an example of a business owned and run by the government for public benefit.

🎯 Exam Tip: Public enterprises are government-owned and controlled, often identifiable by "State" or "Corporation" in their names, reflecting their public sector nature.

Question 9. The National Objectives of business is ..........
(a) Promote Social justice
(b) Special skill
(c) Making a profit
(d) Satisfaction of employees
Answer: (a) Promote Social justice
In simple words: One goal for any business in a country is to help make society fairer and more just for everyone. It means thinking about people's well-being, not just money.

🎯 Exam Tip: When discussing national objectives, always link them to the broader good of the country and its citizens.

Question 10. The primary objective of a business is ..........
(a) Making Profit
(b) Not Making Profit
(c) Special skill
(d) None of the options
Answer: (a) Making Profit
In simple words: The main reason businesses exist is to earn money, or profit, by selling goods or services. This profit helps the business grow and continue operating.

🎯 Exam Tip: Remember that while profit is primary, businesses also have other important goals like social responsibility.

Question 11. Occupation of a Doctor is ..........
(a) Employment
(b) Business
(c) Profession
(d) Sole proprietor
Answer: (c) Profession
In simple words: Being a doctor is called a profession because it needs special training, knowledge, and follows certain rules. People in professions offer skilled services.

🎯 Exam Tip: Distinguish between a profession (specialized skills, ethics), business (buying/selling for profit), and employment (working for wages).

Question 12. The following does not characterize business activity ..........
(a) Production of goods and services
(b) Presence of Risk
(c) Sale or exchange of goods and services
(d) Salary or wages
Answer: (d) Salary or wages
In simple words: Getting a salary or wages is usually what you get from a job (employment), not from running a business yourself. Businesses focus on making and selling things, taking risks, and earning profit.

🎯 Exam Tip: Carefully read "does not characterize" to identify the option that is an exception rather than a rule.

Question 13. Activities undertaken out of love and affection or with social service motive are termed as:
(a) Economic activities
(b) Monetary activities
(c) Non-Economic activities
(d) Financial activities
Answer: (c) Non-Economic activities
In simple words: When people do things because they care or want to help others, without thinking about money, those are called non-economic activities. These activities often bring personal happiness or satisfaction.

🎯 Exam Tip: Remember that economic activities are always linked to earning money, while non-economic activities are for personal satisfaction or social good.

Question 14. The economic activity which is connected with the conversion of resources into useful goods is known as ..........
(a) Commerce
(b) Trade
(c) Industry
(d) Business
Answer: (c) Industry
In simple words: Industry is the part of the economy that changes raw materials into finished products we can use. This involves factories and production processes that create value.

🎯 Exam Tip: Industry focuses on production, while trade and commerce focus on buying and selling of those goods.

II. Very Short Answer Questions

Question 1. What do you mean by non-economic activities?
Answer: Non-economic activities are things people do to meet their social and mental needs. These actions are not done to earn money. For example, a mother cooking for her family is a non-economic activity.
In simple words: Non-economic activities are actions people do for happiness or to help others, not to earn money.

🎯 Exam Tip: Always contrast non-economic activities with economic activities by highlighting the absence of a monetary motive.

Question 2. What do you mean by Employment?
Answer: Employment is a type of work where people work for someone else and get paid a salary or wages. This means there is an employer and an employee, creating a work relationship. For instance, a factory worker or a manager is in employment.
In simple words: Employment is when someone works for another person or company and gets paid for it.

🎯 Exam Tip: Define employment by emphasizing the "working for others" aspect and the receipt of "wages or salary."

Question 3. What are Private Enterprises?
Answer: A private enterprise is a business that is owned, managed, and controlled by individuals or groups of people, not by the government. Most businesses around us, like small shops or big companies run by families, are private enterprises.
In simple words: Private enterprises are businesses run and owned by people, not the government.

🎯 Exam Tip: The key differentiator for a private enterprise is its ownership and control by non-government entities.

Question 4. What are Joint Enterprises?
Answer: Joint enterprises are businesses that are owned, managed, and controlled by both the government and private individuals or companies together. This allows for shared resources and risks between the public and private sectors. Maruti Suzuki is an example of such a company.
In simple words: Joint enterprises are businesses managed and owned by both the government and private individuals.

🎯 Exam Tip: Highlight that joint enterprises combine government and private ownership, sharing both management and control.

Question 5. What is Joint Enterprise?
Answer: A joint enterprise is a business where both the government and private owners manage and control it. This type of setup often helps achieve both public welfare and profit goals. For example, Maruti Suzuki is a well-known joint enterprise in India.
In simple words: A joint enterprise is a business that the government and private people own and run together.

🎯 Exam Tip: Clearly state the dual ownership (government and private) and provide a relevant example to illustrate your understanding.

Question 6. How do you explain large-scale business?
Answer: A large-scale business needs a lot of money (capital), hires many workers, and produces goods in huge quantities. These businesses usually have large factories and reach many customers. Suffola and Sunflower oil industries, which process oilseeds, are examples of large-scale businesses.
In simple words: Large-scale businesses need a lot of money, have many employees, and make a lot of products.

🎯 Exam Tip: The defining features of large-scale businesses are high capital investment, numerous employees, and extensive production volume.

IV. Long Answer Questions

Question 1. Briefly explain the Business activities on the basis of Ownership.
Answer: Business activities can be divided into three main types based on who owns them:
Private Enterprises: These are businesses owned, managed, and controlled by people or groups of people, not the government. For example, a sole proprietorship is a business owned by one person, like Sundar Stationeries. Partnership firms, like Ramesh Bros., are also private enterprises where two or more people own the business.
Public Enterprises: These are businesses owned, managed, and controlled by the government or its agencies. They are set up to serve the public and can take different forms. Examples include the Public Works Department (PWD), Oil and Natural Gas Corporation (ONGC), and State Trading Corporation (STC). Public enterprises focus on providing essential services to citizens.
Joint Enterprises: These businesses are owned, managed, and controlled by both the government and private individuals or companies working together. This collaboration often combines the strengths of both sectors. A good example of a joint enterprise is Maruti Suzuki.
In simple words: Businesses are owned in three ways: by private individuals (Private Enterprises), by the government (Public Enterprises), or by both working together (Joint Enterprises).

🎯 Exam Tip: Clearly define each type of enterprise by its ownership and control, and provide a distinct example for each category to illustrate your points effectively.

Question 2. Write any three characteristics of Business.
Answer: Here are three main characteristics of business:
1. Production or Procurement of Goods: A business always involves making goods or buying them from others to sell. The main goal is to satisfy what people want and need. Goods are created or obtained to meet customer demands.
2. Sale, Transfer, or Exchange: For an activity to be a business, there must be a sale or exchange of goods or services. If someone makes something for their own use, like weaving cloth for themselves, it's not a business because no transfer or sale takes place.
3. Dealing in Goods and Services: Businesses deal in various types of goods and services. Goods can be everyday items like pens and clothes, or bigger items like machines for factories. Services include things like providing electricity, banking, or insurance. This means businesses provide both physical products and helpful services.
In simple words: Businesses make or buy goods, then sell or exchange them, and they deal with many different types of products and services to meet people's needs.

🎯 Exam Tip: When listing characteristics, provide a short explanation for each point to show your understanding, rather than just stating the titles.