Business Studies

Nature and Purpose of Business

Question:

What is business risk? What is its nature?

Answer:

The term business risk refers to possibility of inadequate profits or even losses due to uncertainties e.g., changes in tastes and preferences of consumers, strike, increased competition, change in Government policy etc. These are of two types—speculative and pure.
Nature of Business Risks

  1. Business risks arise due to uncertainties: Natural calamities, change in demand
    and prices, change in technology etc. are some of the examples of uncertainty which create risks.
  2. Risk is an essential part of every business: No business can avoid risk. Risk can be minimised but cannot be eliminated.
  3.  Degree of risk depends mainly upon the nature and size of business: For small scale business it is less and for large scale business it is more.
  4. Profit is the reward for risk taking: An entrepreneur assumes risks and in consideration he gets reward which is called profit. Greater the risk higher is the chance of profit.
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Nature and Purpose of Business

Q 1.

Explain political and legal causes of business risks.

Q 2.

Explain the concept of business.

Q 3.

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

Q 4.

What are the functions of commerce?

Q 5.

Define Profession. Discuss its salient features.

Q 6.

State the different types of economic activities.

Q 7.

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

Q 8.

Explain with examples the various types of industries.

Q 9.

What is business risk? What is its nature?

Q 10.

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

Q 11.

What are various types of industries?

Q 12.

Why is business considered an economic activity?

Q 13.

Explain any two business activities which are auxiliaries to trade.

Q 14.

Explain the characteristics of business.

Q 15.

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

Q 16.

How would you classify business activities?

Q 17.

Define commerce. Discuss its importance in the business world.

Q 18.

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

Q 19.

What is the role of profit in business?

Q 20.

Compare business with profession and employment.

Q 21.

Explain the concept of business risk and its causes.

Q 22.

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

Q 23.

Distinguish between industry, trade and commerce.

Q 24.

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

Q 25.

Describe the activities relating to commerce.

Q 26.

Compare business with profession and employment.

Q 27.

Distinguish between industry, trade and commerce.

Q 28.

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

Q 29.

Explain the economic and social objectives of the business.

Q 30.

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

Q 31.

What are the functions of commerce?

Q 32.

"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.

Q 33.

Differentiate between economic and non-economic activities.

Q 34.

Differentiate between insurable risks and non-insurable risks.