Chapter 1 Nature and Purpose of Business NCERT Solutions in Business Studies For Class 11 CBSE

 

Chapter 1: Nature and Purpose of Business in Business Studies For Class 11 CBSE

In this chapter, we provide more important things like the brief explanation, short questions as well as long questions and their answers. students have more benefits anyone can download nature and purpose of business class 11 PDF download and students if you want good percentage so read carefully questions and answers of this chapter nature and purpose of business because we are doing class 11 business studies chapter 1 explanation in very simple language.

What is name of 5 major commercial cities of ancient India?

Harappa and Mohenjodaro, Indraprastha, Mathura Mithila, and Surat are 5 major commercial cities of ancient India.

What is Hundi?

Hundi can be defined as a financial instrument or a negotiable bill of exchange, which was used for carrying out trade and credit transactions during the medieval period in India.

List the major exports and imports in ancient India?

In ancient India, the majority of the exports consisted of spices, wheat, indigo, opium, sugar, cotton, etc, and animal production such as skin, furs, horns, tortoise shells, pearls, etc. On the other hand, the imports mainly included animal products, Chinese silk, gold, and silver, etc.

What do you understand by maritime trade?

Maritime trade refers to trading or shipments of goods, via sea or other ways. In early times, the Malabar coast, coromandel coast, etc were important parts that facilitated maritime in India.

States different types of economic activities?

The following are different types of Economics activities are :

(a) Business:- It basically involves trading goods and services regularly. the sole motive with which business is conducted is profit.

(b) Profession:- A profession is an occupation that requires highly specific and in-depth knowledge of the relevant field. Every profession is different in terms of the knowledge and skills required to practice it for instance a doctor can not engage in the profession of an engineer.

(c) Employment:- In this type of economic activity people are hired by organizations to work regularly and are paid in exchange for their services. Normally a monetary terms along with certain non-monetary compensation such as perks and other types of allowances.

What is the meaning of business?

The term 'business' has been derived from the word 'busy' which means engaged in an activity. A person who is engaged in business trade of goods and services for a profit which is the sole motive of conducting business.

What is a profit motive? 

Profit motive means profit earning is one of the main objectives of business activity. Businesses earn profit not only to cover their costs but also for survival and future growth.

Why is business considered an economic activity?

Business is primarily undertaken to earn money to finance one's livelihood. It can be said that the sole motive with which a business is run is profit that means, the main objective is to increase the market share, improvement in productivity, employee satisfaction, consumer satisfaction, social objectives but the main objective of a business to earn profits. therefore, it is called economic activity.

What is the role of profits in a business?

Earning a profit is the sole motive of any business activity. A business can't sustain itself for a long time if it does not earn sufficient profits. This because, for a business to continue, a part of profit has to be re-invested in the business. Re-invested also ensures the growth prospects of a business and enhances its future profit-earning capacity.

What are the various types of industries?

The following are the different types of industries.

(a) Primary industries:- These industries basically undertake activities related to the extraction and processing of natural resources. These industries directly use natural resources as the raw material and convert them into a consumable form. for example, agriculture mining, and fishing are some activities undertaken by primary activities. 

(b) Secondary industries:- These industries are also known as manufacturing industries, acquire raw materials and convert them into final goods after further processing and value addition.

(c) Tertiary industries:- This industry is regarded as the lifeline of an economy and acts as the basic facilitators for the operation of primary and secondary activities. The major service provided by the tertiary Industries such as banking facilities communication and transport etc.

Business activity can be classified into two brand categories.

(a) Industry:- It refers to economic activities in which raw material are processed and converted into final goods, during the process value addition to the raw materials take place and the final product have a higher value. compared with the raw materials. For example, a piece of cloth has a higher value than the cotton from which it is produced. therefore, we can say that industries produce goods that are readily consumable by final consumption.

(b) Commerce:- Unlike industry, commerce does not involve manufacturing or production. It is basically involves trading and its related activities commerce includes the exchange of goods and services to keep them within the reach of the final consumers. The major commercial activities are transportation, advertisement warehousing, etc.

Explain any five objectives of business?

Objectives of businesses are :

(a) Profit Earnings:- For successful survival and continuous growth business must earn profits. Thus businesses need to make directed efforts to words minimization of costs and maximization of profit.

(b) Market standing:- Market standing refers to the position of an enterprise about its competitors in the market. For instance, the position of Samsung electronics about LG electronics. A business's market standing is measured by its market share. It is a must for businesses to exploit the market potential to its benefits and provide competitive and quality products to have a strong footing in the market.

(c) Innovation:- Innovation is the introduction of new ideas or methods in the way something is done or made. There are two kinds of innovation in every business i.e, (i) Innovation in products or services, (ii) Innovation in skills, and various activities needed to supply products and services. No business enterprise can flourish in a competitive world without innovation.

(d) Productivity:- Productivity is ascertained by comparing the value of output with the value of inputs. It is used as a measure of efficiency. To ensure continuous survival and progress, every enterprise must aim at greater productivity through the best use of available resources.

(e) Manager performance and development:- Business enterprises need managers to conduct and coordinate business activity. various programs for motivating managers need to be implemented. Manager for performance and development, therefore, is an important objective. The Enterprises must actively work for this purpose.

Also check:-  Best 3 Books For Commerce Students in Class 11th CBSE (easy way to learn)  

Discuss the development of the Indigenous banking system in the Indian subcontinent?

The following points highlight the development of the Indigenous banking system in the Indian subcontinent :

(a) Metals as money:- Initially, the metals were used as money due to high durability and divisibility. In fact, the use of metallic money boosted the number of transactions and accelerate economic activities.

(b) Use of Hundi and Chitti:- Hundi and Chitti were financial institutions that were used for carrying out trade and credit transactions during the medieval period in India.

(c) Development of banks:- With the use of currency and letters of credit, the Indian banking system started lending money and finance the domestic and foreign trade in India.

(d) Agriculture and livelihood opportunities:- In the Indian subcontinent, agriculture and the domestication of animals were an important sources of livelihood. along with this people also relied on another source of earning a livelihood such as wearing cotton, making clay pots, utensils and handicrafts.

(e) Role of Intermediaries:- The Intermediaries and other institutions such as Jagat Seth developed an exercise of great control and influence during the days of Mughals and the East India Company.

(f) Credit transactions:- With the development of credit facilities and availability of loans and advances, the commercial activities and operations enhanced and the Indian subcontinent started enjoying the benefits from a favorable balance of trade.

(f) Evolvement of Indigenous banking:- The indigenous banking system not only benefited the manufacturers or traders by facilitating trade but also help those merchants with additional funds who were looking for expansion and development.

What is the nature of business risk?

So, let us know about 3 major types of business risk,

(a) Business risk arises due to uncertainties:- Uncertainties refers to the lack of knowledge about what is going to happen in future natural calamities, change in demand and prices, change in government policies, etc.

(b) Risk is an essential part of every business:- Every business has some risk no business can avoid risk, although, the amount of risk may vary from business to business.

(c) Profit is the reward for risk-taking:- 'No risk, no gain is an age-old principle which applies to all types of business. The greater the risk involved in a business, the higher is the chance of profit. An entrepreneur undertakes risk under the expectation of higher profit is thus the reward for risk-taking.

What is the business risk for example?  

Business risk is the possibility of failing to and sufficient profit or encouraging losses as a result of various unforeseen circumstances which are beyond the control of the business. For example, there is always a risk associated with the demand for a product, which is highly influenced by changes in consumer preferences. It is extremely difficult for a business person to correctly anticipate consumer preferences, as a result of which he or she always faces the risk of unforeseen fluctuations in demand.

Conclusion :-

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