Question:
Explain the concept of business risk and its causes.
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.
Causes of Business Risks:
- Natural causes: The causes which are beyond human control e.g., flood, earthquake, heavy rains, famine etc.
- Human causes: It includes carelessness or negligence of employees e.g., theft, strikes, riots, misappropriation of cash and products etc.
- Economic causes: It is related to a chance of loss due to change in market condition e.g., fluctuations in demand and prices, competition, change in technology etc.
- Physical causes: Mechanical defects or failures which may also lead to losses e.g., bursting of boiler or machine, may cause death or destruction.
- Other causes: These include unforeseen events like political disturbances, fluctuation in exchange rates etc.
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.
"No business is risk free."Do you agree? Justify your answer, mentioning the nature and causes of business risk.
Q 7.
What is business risk? What is its nature?
Q 8.
What are various types of industries?
Q 9.
Explain any two business activities which are auxiliaries to trade.
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.
Why is business considered an economic activity?
Q 12.
State the different types of economic activities.
Q 13.
Explain with examples the various types of industries.
Q 14.
Explain the characteristics of business.
Q 15.
How would you classify business activities?
Q 16.
If one starts a business, which objective will be of utmost importance to you and why?
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.
