What went wrong when the king rode under the arch?

It was too low and knocked off his crown

How does the chain of blame unfold in the poem?

Each accused person blames another, ending with the king's own changes

Why is business considered an economic activity?

Because it is undertaken to earn money or a livelihood, and not out of love, affection or sympathy.

State the meaning of business.

Business is an economic activity involving the regular production and sale of goods and services with the motive of earning profit by satisfying human needs.

How are economic activities classified?

Into three categories — business, profession and employment.

What are the various types of industries?

Primary (extractive and genetic), secondary (manufacturing and construction) and tertiary (service) industries.

What does commerce include?

Commerce includes trade (buying and selling of goods) and the auxiliaries to trade such as transport and communication, banking and finance, insurance, warehousing and advertising.

What is the role of profit in business?

Profit is a source of income and finance for expansion, indicates efficient working, reflects society's approval and builds reputation; it is the reward for risk-taking.

What is meant by business risk?

It refers to the possibility of inadequate profits or even losses due to uncertainties or unexpected events.

State the causes of business risk.

Natural causes, human causes, economic causes and other causes such as political disturbances and exchange-rate fluctuations.

Hundi, which literally means "to collect", was an indigenous instrument written in vernacular language to facilitate the safe transfer of money and credit for trading activities.

Name any four factors to be considered while starting a business.

Selection of type of business, size of business, location of the enterprise, and financing the proposition.

Business, Trade and Commerce

Class 11 Business Studies · Business Studies · Chapter 1

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CBSE Class 11 · Business Studies

Every merit and limitation of 11 chapters

Marks booster + cheatsheet: key concepts in 2 lines each, common traps
20 marks: finance and MSME units
20 marks: internal and international trade
Five comparison tables, insurance to retail
Case cues for each chapter
Common traps, corrected

Page 1 free about 8 min read, Full kit about 55 min read

₹159See the full kit

CBSE Class 11 · Business Studies

Every merit and limitation of 11 chapters

Marks booster + cheatsheet: key concepts in 2 lines each, common traps
20 marks: finance and MSME units
20 marks: internal and international trade
Five comparison tables, insurance to retail
Case cues for each chapter
Common traps, corrected

Page 1 free about 8 min read, Full kit about 55 min read

₹159See the full kit

View all 44 amazing Marks Booster kits →

Summary

All human beings require goods and services to satisfy their needs, which are supplied by people engaged in economic activities such as production, exchange and distribution. The chapter traces the role of business in the development of the economy, recalling India's golden trading past, the Silk Route, indigenous instruments like Hundi and Chitties, leading ancient trade centres and the impact of the East India Company and the 1991 economic liberalisation. Business is an economic activity involving the regular production or purchase and sale of goods and services with a view to earning profit by satisfying human wants. Its characteristics include being an economic activity, production or procurement of goods and services, sale or exchange for value, regularity of dealings, profit earning, uncertainty of return and an element of risk. Economic activities are divided into business, profession and employment. Business activities are classified into industry (primary — extractive and genetic; secondary — manufacturing and construction; tertiary — services) and commerce (trade and the auxiliaries to trade: transport and communication, banking and finance, insurance, warehousing, and advertising). Besides profit, the objectives of business include market standing, innovation, productivity, physical and financial resources and social responsibility. Business risk — speculative and pure — arises from natural, human, economic and other causes, and profit is the reward for risk-taking. Factors to consider before starting a business include selection of type and size, location, financing, physical facilities, workforce, tax planning and launching the enterprise.

Role of business in development of the economyConcept and characteristics of businessBusiness, profession and employmentClassification — industry and commerceTrade and auxiliaries to tradeObjectives of businessBusiness risk and its causesFactors for starting a business

Key terms

Business

An economic activity involving the regular production or purchase and sale of goods and services to earn profit and satisfy human wants.

Profession

An occupation involving specialised knowledge and skill, governed by a professional body and code of conduct, earning a professional fee.

Employment

Working for others under a service contract or rules of service in return for wages or salary.

Industry

Activities concerned with the production or processing of goods and materials, classified as primary, secondary and tertiary.

Commerce

Activities that facilitate the exchange of goods and services, comprising trade and the auxiliaries to trade.

Business risk

The possibility of inadequate profits or losses due to uncertainties; it may be speculative (gain or loss) or pure (loss or no loss).

Extra questions & answers

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Business is best described as:

Flashcards & interactive practice