business studies - nature and purpose of business

Class 11 - Business Studies

Nature and Purpose of Business

MCQ
Q&A
Question:

Can profits be the sole objective of a business? Justify your answer by giving suitable reasons.

Answer:

A layman may say that profits are the only objective with which a business is carried on but a good business man cannot keep profits as his only motive. A business organization is an economic unit which makes use of various factors of production. Capital is one of the factors of production. It pays interest in the form of profits. Ur wick has put it beautifully, "Earning of profits cannot be objective of business any more than eating is the objective of living."There must be other objectives of a business which Eire non monetary but as important as monetary, like employee satisfaction, innovation, productivity, consumer satisfaction, etc.
Following reasons can be given to justify our opinion that profits cannot be the sole objective of a business.

  1. If we make profits to be only objective then interests of consumers, employees and society will be ignored.
  2. Maximum profits in the short run, may result worse for long term interest of the company.
  3. In present day scenario, when consumer awareness is increasing, labour laws are becoming stringent, social responsibilities of business is being highlighted, environment is being talked about, a business needs to set its objectives for satisfaction of consumers, employees, environmentalists, government etc.


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Questions and Answers


Nature and Purpose of Business - Questions
1.

State the different types of economic activities.


Answer
2.

Explain the concept of business.


Answer
3.

How would you classify business activities?


Answer
4.

What are various types of industries?


Answer
5.

Explain any two business activities which are auxiliaries to trade.


Answer
6.

What is the role of profit in business?


Answer
7.

What is business risk? What is its nature?


Answer
8.

Explain the characteristics of business.


Answer
9.

Compare business with profession and employment.


Answer
10.

Describe the activities relating to commerce.


Answer
11.

What factors are important to be considered while starting a business? Explain.


Answer
12.

Differentiate between economic and non-economic activities.


Answer
13.

What are the functions of commerce?


Answer
14.

What are the functions of commerce?


Answer
15.

Distinguish between industry, trade and commerce.


Answer
16.

Distinguish between industry, trade and commerce.


Answer
17.

Explain political and legal causes of business risks.


Answer
18.

Differentiate between insurable risks and non-insurable risks.


Answer
19.

What are the hindrances in the commerce? Which agencies are used to remove these hindrances?


Answer
20.

Define Profession. Discuss its salient features.


Answer
21.

Explain the economic and social objectives of the business.


Answer
22.

Define commerce. Discuss its importance in the business world.


Answer
23.

"No business is risk free."Do you agree? Justify your answer, mentioning the nature and causes of business risk.


Answer
24.

"Risk is the element which makes the business different from other economic activities."Do you agree? Justify your answer.


Answer
25.

"Economic and non-economic activities don't substitute, but complementary to each other."Do you agree? Explain.


Answer
26.

If you need , to start doing an economic activity to earn livelihood for your family, which one would you like and why?


Answer
27.

If one starts a business, which objective will be of utmost importance to you and why?


Answer
28.

Why is business considered an economic activity?


Answer
29.

Explain with examples the various types of industries.


Answer
30.

Why does business need multiple objectives? Explain any five such objectives.


Answer
31.

Explain the concept of business risk and its causes.


Answer
32.

Can profits be the sole objective of a business? Justify your answer by giving suitable reasons.


Answer
33.

Compare business with profession and employment.


Answer
34.

"Earning of profits is the main objective of a business and other objectives are there to aid it only."Do you agree? Justify your answer.


Answer
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