Please refer to Business Trade and Commerce Class 11 Business Studies Important Questions with answers below. These solved questions for Chapter 1 Business Trade and Commerce in NCERT Book for Class 11 Business Studies have been prepared based on the latest syllabus and examination guidelines issued by CBSE, NCERT, and KVS. Students should learn these solved problems properly as these will help them to get better marks in your class tests and examinations. You will also be able to understand how to write answers properly. Revise these questions and answers regularly. We have provided Notes for Class 11 Business Studies for all chapters in your textbooks.

Important Questions Class 11 Business Studies Chapter 1 Business Trade and Commerce

All Business Trade and Commerce Class 11 Business Studies Important Questions provided below have been prepared by expert teachers of Standard 11 Business Studies. Please learn them and let us know if you have any questions.

Short Answer Type Questions

Question. Compare between Business, profession & Employment on the basis of the following:
a) Capital Investment
b) Risk
c) Transfer of interest

Answer :

Question. Explain any four objectives of business
Answer : Objectives of Business are as follows:
1. Earning Profits: Business has to earn reasonable profit so as to sustain its growth and survive in the
market
2. Market Standing: Business should have a better position in the market in relation to its competitors
3. Innovation: Business should come up with new ideas, inventions and new methods for sustainable
growth and survival
4. Productivity: Productivity is ascertained by comparing the value of output with the value of input.
Business must work efficiently and effectively so as to enhance its productivity.

Question. Distinguish between primary & secondary industry Give examples.
Answer :

Question. Write difference among industry, commerce and trade on any five basis.
Answer :

Long Answer Type Questions

Question. What provides the necessary link between producers & consumers with all those activities which are necessary for maintaining a free flow of goods & services? Discuss all those activities.
OR
In business activities, there are some activities that are involved in the removal of hindrances in process of exchange i.e. from the producer to the consumer Identify them.
Also classify the activities which help in removing the following hindrances:
(i)Hindrance of place
(ii)Hindrance of risk
(iii)Hindrance of time
(iv)Hindrance of finance
(v)Hindrance of information
OR
Tea is mainly produced in Assam, while cotton in Gujrat & Maharastra but they are required for consumption in different parts of the country. How can this hindrance of place be removed? Also
under what business activity will it be categorised.
OR
Commerce is the sum total of activities that remove hindrances in the free flow of goods from producers to consumers. Explain.
OR
How do trader remove the hindrance of person?
Answer :
Commerce refers to all those activities which are concerned with the transfer of goods and services from the producers to the consumers. It embraces all those activities which are necessary for maintaining a free flow of goods and services. The functions of commerce are as follows.

1. Removing the hindrance of person by marking goods available to consumers from the producers through trade.
2. Transportation removes hindrance of place by moving goods from the place of production to the markets for sale.
3. Storage and warehousing activities remove the hindrance of time by facilitating holding of stock of goods to be sold as and when required.
4. Insurance removes hindrance of risk of loss or damage of goods due to theft, fire, accidents etc.
5. Banking removes hindrance of finance-by providing funds to a businessman for acquiring assets, purchasing raw materials and meeting other expenses.
6. Advertising removes hindrance of information-by informing consumers about the goods and services available in the market.

Question. Profit maximization cannot be the sole objective of a business. Explain.
OR
“Profit is not an objective but a requirement of business.” Do you agree with the statement? Support
your answers with reasons
OR
“Overemphasis on objective to earn profit may exploit the business”. What does a business should do
to enable itself to bring the balance?
Answer : Business is established for the purpose of earning profit. Profit plays a very important role in business for survival, growth, expansion but profit maximization is not the sole objective of business
Business is an integral part of society. It makes use of resources of society. It earns profit by selling its
products or services to members of society. So it becomes obligatory on the part of the businessman to
do something for the society.
The important social objective of business are as follows:
1. Quality goods and services at Fair Price: The first social objective of business is to provide better
quality product at reasonable rice and in proper quantity on continuous basis to consumers
2. Avoidance of Anti-Social and Unfair trade practices: Anti-Social practices include hoarding, black
marketing and adulteration. Making false claims in advertisements to mislead and exploit people is an
example of unfair trade practice. Business should not indulge in such practices.
3. Generation of Employment: Now a days, employment is the biggest problem of society. Business
should provide employment to more and more people living in the country.
4. Employee Welfare: Employees are a valuable asset and they make significant contributions towards
the success of business. Another social objective of business, therefore, is to ensure welfare of
employees by providing good working conditions, fair wages and facilities such as housing, medical and
entertainment etc. such welfare facilities help to improve physical and mental health of employees.
5. Community service: Business should contribute something to the society where it is established and
operated Library, dispensary, educational institutions etc. are certain contributions which a business can
make and help in the development of community.

Question. JawaharLal prepares ‘Ghujiya’ for customers during Holi season every year. He prepared more ‘Ghujiya’ than he could sell this year. He employed women and children also and paid them less salary manufacturing on the packages. This way he generated profit for himself.
(a)Do you think he is fulfilling all the objectives of business?
(b) If not which aspects of this objective are not being fulfilled?
(c)Write any two values lacking in JawaharLal.
Answer : a) No, he is not fulfilling all the objectives of the business. Business is concentrating on the objective of profit earning. Business is an integral part of society. It makes use of resources of society. It earns profit by selling its products or services to members of society. So it becomes obligatory on the part of the businessman to do something for the society.
b) Social objectives of business are not fulfilled. Business has two aspect of objectives. One is economic which means profit earning, productivity, innovation, market standing etc. Other aspect is social objective which consist of Quality goods, avoid unfair trade practices, employee welfare, community service, generation of employment etc.
c) Two values lacking in Jawaharlal are as follows:
1. Ethical practices: Jawarharlal has appointed women and children for manufacturing to generate profit. This behavior is unethical as Child labour is unethical practice in India. Business should not indulge in unfair, unethical trade practices. Anti-Social practices include hoarding, black marketing and adulteration. Making false claims in advertisements to mislead and exploit people is an example of unfair trade practice
2. Employee welfare: Employees are a valuable asset and they make significant contributions towards the success of business. Objective of business is to ensure welfare of employees by providing good working conditions, fair wages and facilities such as housing, medical and entertainment etc. such welfare facilities help to improve physical and mental health of employees. Jawaharlal paid less wages to manufacture ghujiya. Fair wages are not paid so, employee welfare objective is not met.

Question. Dr. Sanvi is an orthopedic surgeon in AIIMS Hospital and Dr Maruti, her friend is a Pediatrician who has set his own clinic. Dr Maruti’s wife, Ms. Aditi operates her Cosmetic store. Compare &differentiate the nature of tasks undertaken by them.
Answer : Dr. Sanvi , an orthopedic surgeon in AIIMS Hospital is on employment whereas Dr Maruti , pediatrician having own clinic is following his profession and his wife Aditi owns Cosmetic store which is a business.
Difference in the nature of tasks undertaken by them are given below:

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.
Answer :
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.