This page contains the entrepreneurship class 11 cbse book chapter/unit Concept of Market Know Thy Business notes where in the questions/answers/solutions for this chapter/unit 5.e are covered.
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Very Short Answers
Question Q.1.(i)
Q.1.(i) Define the term ‘Business’.
Answer Q.1.(i)
Business is an economic activity carried on regularly to earn profit through goods and services.
Question Q.1.(ii)
Q.1.(ii) What is the epicenter of human life?
Answer Q.1.(ii)
Business is called the epicenter of human life because it supports daily economic activity and livelihood.
Question Q.1.(iii)
Q.1.(iii) Enlist any four characteristics of Business.
Answer Q.1.(iii)
Four characteristics are:economic activity, regular dealings, profit motive, and element of risk.
Question Q.1.(iv)
Q.1.(iv) What is the final outcome of an industrial activity.
Answer Q.1.(iv)
The final outcome of an industrial activity is the production of goods and services.
Question Q.1.(v)
Q.1.(v) Name the various types of trade.
Answer Q.1.(v)
The various types of trade are internal trade and external trade.
Question Q.1.(vi)
Q.1.(vi) What is “Commerce”
Answer Q.1.(vi)
Commerce means trade and aids to trade, helping goods move from producer to consumer.
Short Answers
Question Q.2.(i)
Q.2.(i) State the range of activities performed under Business.
Answer Q.2.(i)
The range of activities performed under business can be broadly classified into two categories: Industry and Commerce. The business activities include production of goods, rendering of services, distribution of goods, rendering distribution assistance, and rendering financial assistance.
Question Q.2.(ii)
Q.2.(ii) Explain any two business activities which are auxiliaries to trade.
Answer Q.2.(ii)
Two important auxiliaries to trade are:
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Transport– It helps in moving goods from one place to another and removes the hindrance of place.
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Warehousing– It provides storage facility to producers and traders and removes the hindrance of time.
Question Q.2.(iii)
Q.2.(iii) Define “construction industry”.
Answer Q.2.(iii)
Construction industry is the industry engaged in creating infrastructure for the smooth development of the economy. It is concerned with the construction, erection, or fabrication of works such as buildings, dams, roads, bridges, and canals. Engineering and architectural skills are very important in this industry.
Question Q.2.(iv)
Q.2.(iv) Define “tertiary industry”.
Answer Q.2.(iv)
Tertiary industry, also called service industry, comprises activities concerned with rendering services that help other businesses perform smoothly. It acts as the backbone of the modern industrial system and bridges the gap between producers and consumers by removing hindrances in production and distribution.
Long Answers
Question Q.3.(i)
Q.3.(i) Define “Trade” and its types.
Answer Q.3.(i)
Trade means the buying and selling of goods and services. It forms an important part of commerce and helps in the exchange process. Trade is broadly of two types:Internal Trade and External Trade. Internal trade takes place within a country and includes wholesale and retail trade. External trade takes place between two or more countries and includes import, export, and entrepot trade.
Question Q.3.(ii)
Q.3.(ii) What is ‘Business’? State its characteristics?
Answer Q.3.(ii)
Business is an economic activity carried on regularly for earning profit through production, purchase, and sale of goods and services. Its main characteristics are:
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Economic activity
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Production or exchange of goods and services
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Regular dealings
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Profit motive
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Element of risk and uncertainty
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Creation of utility
Thus, business is not a one-time activity. It is a continuous economic activity done with the objective of earning profit.
Question Q.3.(iii)
Q.3.(iii) Explain “Transportation”. State the modes of transportation and communication.
Answer Q.3.(iii)
Transportation means the physical movement of goods or passengers from one place to another. It removes the hindrance of place and forms a link between the place of production and the place of consumption. It is an important aid to trade because producers and consumers are geographically scattered.
Modes of transportation are:
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Railways
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Roadways
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Airways
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Waterways
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Pipelines
Modes of communication are:
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Telephone
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Telegram
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E-mails
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Online communication
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Fax
Very Long Answer Questions
Question Q.4.(i)
Q.4.(i) State briefly the various types of Primary industries.
Answer Q.4.(i)
Primary industries are those industries which are concerned with the extraction, production, and use of natural resources. The primary industry includes activities related to extraction and producing wealth from nature. It further classifies primary industries into two types: Extractive and Genetic.
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Extractive Industry: This industry is engaged in raising some form of wealth from the soil, climate, air, water, or from beneath the surface of the earth. Examples are agriculture, fishing, hunting, mining, and soil exploration. These industries are among the oldest occupations of human beings and they provide raw materials to other industries. Human beings mainly collect wealth from nature here and cannot really add to the extracted natural wealth. Also, once many materials are extracted, they cannot be basically replaced.
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Genetic Industry: Genetic industry is related to the reproducing and multiplying of certain species of plants and animals with the object of earning profit from their sale. It includes activities like rearing and breeding of animals and birds and growing plants. Examples are nurseries, cattle breeding, fish hatcheries, and poultry farms.
Thus, primary industries form the base of economic activity because they provide natural wealth and essential raw materials for other industries.
Question Q.4.(ii)
Q.4.(ii) Rahul, an owner of a huge Departmental Store, charges exorbitantly due to no competition around, and he misses out on no opportunity to earn profit. He finds nothing wrong as the main goal of business is to earn ‘Profit’. Discuss any four values which you find are lacking in him as a rational businessman.
Answer Q.4.(ii)
Rahul’s thinking is not fully correct. Profit is definitely an important objective of business, but a rational businessman should not ignore values. Business and entrepreneurship also create social benefits, raise the standard of living, and satisfy consumer wants.
Four important values lacking in Rahul are:
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Fairness: Charging exorbitantly just because there is no competition is unfair. A businessman should charge reasonably and not exploit customers.
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Concern for consumer satisfaction: Marketing is directed towards the satisfaction of consumer wants. Rahul is focusing only on profit and not on customer welfare.
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Social responsibility: Business benefits not only the enterprise but also society at large. By overcharging, Rahul is not helping in raising the standard of living or serving society properly.
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Ethical conduct / honesty in business: A rational businessman should follow ethical behaviour and not misuse monopoly power for personal gain.
So, Rahul may be earning profit, but he is lacking the values of fairness, consumer orientation, social responsibility, and ethical business behaviour. A good businessman should earn profit in a responsible and balanced way.
Question Q.4.(iii)
Q.4.(iii) Define commerce and discuss its functions.
Answer Q.4.(iii)
Commerce is concerned with all those activities which facilitate the exchange of goods and services and the transfer of goods from the place of production to the ultimate consumer. Without commerce, production has no meaning. Commerce helps remove the barriers between producers and consumers and creates time, place, and possession utility.
The main functions of commerce are:
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Transport and Communication: Transport helps in moving goods from one place to another and communication connects buyers and sellers. These remove the hindrance of place.
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Banking: Banking removes the hindrance of finance by providing credit, guidance, counselling, and even support in trade.
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Insurance: Business is full of risks like theft, fire, damage, and loss in transport. Insurance removes the hindrance of risk by providing cover against such uncertainties.
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Warehousing: Goods are often produced before they are needed. Warehousing provides storage and removes the hindrance of time.
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Advertisement and Salesmanship: These provide information to customers and help them make sensible purchase decisions. Thus they remove the hindrance of information.
So, commerce ensures smooth flow of goods and services in the economy.
Question Q.4.(iv)
Q.4.(iv) Differentiate between Industry Commerce and Trade, explaining the main characteristics of each.
Answer Q.4.(iv)
Basis
Industry
Commerce
Trade
Meaning
Industry is concerned with the production, processing, and fabrication of goods.
Commerce includes all activities that facilitate exchange and transfer goods from producer to consumer.
Trade means the buying and selling of goods and services.
Main nature
It creates goods or form utility.
It supports movement and exchange of goods.
It is the central act of exchange.
Main branches
Primary, Secondary, and Tertiary industries.
Trade and aids to trade like transport, banking, insurance, warehousing, advertisement.
Internal trade and external trade.
Example
Mining, manufacturing cloth, construction.
Warehousing, insurance, transport, banking.
Wholesale and retail purchase and sale.
Thus,industry produces,trade buys and sells, and commerce supports and facilitates the whole exchange process.
Question Q.4.(v)
Q.4.(v) What do you understand by the term Industry? Explain the various types of industries?
Answer Q.4.(v)
Industry refers to the economic activity concerned with the production of goods, extraction of natural wealth, or rendering of services. Industries are broadly classified according to the nature of activities performed.
The various types of industries are:
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Primary Industry: This includes activities concerned with natural resources. It has two forms:
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Extractive: agriculture, fishing, hunting, mining, soil exploration.
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Genetic: nurseries, cattle breeding, fish hatcheries, poultry farms.
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Secondary Industry: These industries transform materials provided by primary industries. It includes:
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Manufacturing industry, which converts raw material into finished or semi-finished goods. It may be analytical, synthetic, processing, or assembling.
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Construction industry, which creates infrastructure like buildings, dams, roads, bridges, and canals.
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Tertiary or Service Industry: These industries render services that help other businesses function smoothly, such as transport, banking, insurance, warehousing, and advertising.
Thus, industry is a broad term covering extraction, manufacturing, construction, and services.
Question Q.4.(vi)
Q.4.(vi) Mohan Pvt. Ltd. just commenced with the business of Blue Pottery. Explain the auxiliaries required for the smooth functioning of their newly set enterprise.
Answer Q.4.(vi)
For the smooth functioning of Mohan Pvt. Ltd., which has started the business of Blue Pottery, several auxiliaries to trade will be needed. These activities help goods move smoothly from producer to consumer and remove different hindrances in business.
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Transport and Communication Blue Pottery products must be moved from the workshop to shops, exhibitions, or customers. Transport removes the hindrance of place. Communication helps in dealing with buyers, suppliers, and transporters.
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Banking: The enterprise will need banking for deposits, payments, loans, and working capital. Banks remove the hindrance of finance and support business operations.
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Insurance: Blue Pottery items are fragile and can be damaged in storage or transport. Insurance provides cover against risks like theft, fire, and breakage.
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Warehousing: Finished pottery items may need safe storage until they are sold. Warehousing removes the hindrance of time and helps maintain stock.
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Advertisement and Salesmanship: Since pottery is an artistic product, customers need information and attraction. Advertisement and salesmanship help create awareness and increase sales.
Therefore, these auxiliaries are essential for the success of Mohan Pvt. Ltd.
Question Q.4.(vii)
Q.4.(vii) What are secondary industries? Discuss briefly the different types of secondary industries.
Answer Q.4.(vii)
Secondary industries are those industries which are concerned with the transformation of the materials provided by primary industries. For example, mining of gold is a primary activity, while manufacturing gold jewellery is a secondary activity.
Secondary industries are of the following types:
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Manufacturing Industry: This industry converts raw materials into semi-finished or finished goods and creates form utility. It is further divided into:
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Analytical industry: one basic material is separated into distinct final products, like crude oil into petrol, diesel, kerosene, etc.
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Synthetic industry: different raw materials are combined to produce one final product, like cement, paint, soap, and yarn.
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Processing industry: a product passes through various processes before becoming final, like cotton becoming cloth.
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Assembling / Integration industry: final product is made by assembling various parts, like bicycle, automobile, and television.
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Construction Industry: It is engaged in creating infrastructure such as buildings, dams, roads, bridges, and canals.
Thus, secondary industries play a vital role because they transform natural resources into useful products and infrastructure.