NCERT Solution For Class 11 Business Studies Chapter 1 – Business, Trade And Commerce

A broad variety of definitions and introduction to the topic are offered by Business Studies Class 11 Chapter 1 – Business, Trade, and Commerce, which includes all the questions provided in the NCERT Solutions for Class 11 books.

Economics is a social science concerned with the production, distribution (allocation), and expenditure or utilization of goods and services. It is a study of how individuals, trades, governments, and countries make choices on the distribution of resources in order to convince their needs and to try to determine how these categories should combine and coordinate efforts to achieve maximum output. Economic analysis generally advances through analytical processes, more like mathematical logic, where the inferences of distinct human pursuits are reflected in the “means-ends” substructure.

NCERT Solutions of the 11th Std Business Studies – business trade and commerce has been provided to ace up your preparation. Access and use the direct links available for Chapterwise Class 11 NCERT Solutions whenever you want. The detailed approach used to explain the NCERT Solutions of the 11th Std Business Studies makes it easy for you to understand the concepts behind them.

NCERT Solutions is said to be an extremely helpful book during the preparation of the CBSE Class 11 Business Studies Exams. This study material has deep knowledge, and the solutions collected by the subject matter wizards are not separate.

NCERT Solution For Class 11 Business Studies 1 – Business, Trade And Commerce provides us with all-inclusive information on all concepts. As students would have to learn the basics about the subject of economics in class 11, this curriculum for class 11 is a comprehensive study material, which explains the concepts in a great way.

Short Questions

1. List any five major commercial cities of ancient India?

Commercial cities of Ancient India are:

1. Pataliputra
2. Taxila
3. Indraprastha
4. Mohenjodaro
5. Mathura
6. What is Hundi?

Hundi is a financial instrument which was developed in medieval India to carry out trade and loan related transactions. It is an unconditional order in writing by a person instructing another to pay a certain amount to a person named in the order. It is capable of change through transfer by valid negotiation.

3. List the major exports and imports in ancient India.

India’s export items include – Peas, wheat, sugar, indigo, opium, cotton, parrot, sesame oil, live animals and animal products such as skins, skins, horns, fur, turtle shells, amethyst, pearls, quartz, crystals, Are lapis. , Granite, lazuli, turquoise and copper etc.The items imported included horses, animal products, Chinese silk, flax and linen, wine, glass, gold, silver, tin, lead, copper, rubies, coral, amber, etc.

4. What were the different types of Hundi in use by traders in ancient times?

Types of hundi are:

1. Shah Jog Hundi: Payable to a respectable man
2. Jokhmi Hundi: It is a type of hundi which is applicable on goods transported by ship
3. Nam Jog Hundi: Payable to the named party or his order
4. Dhani Hundi: Payable to owner of hundi
5. Jawabi Hundi: A type of hundi that resembles a money order.
6. Darshani Hundi: Payable on sight
7. Miadi Hundi or Muddati Hundi: Hundi that is payable after a specified period of time.
8. What do you understand by maritime trade?

A type of trade which involves the transport of goods through the sea using ships because the primary medium is called maritime trade. There are specific rules for this kind of trade as there is a risk involved in transporting goods through the sea.

6. State the different types of economic activities.

The various economic activities are:1. Profession: These are activities that require specific skills and knowledge and the people involved are known as professionals2. Employment: It is a type of economic activity, where people pay for the service they provide and are known as employees.3. Business: It is an economic activity that deals with the trade of goods and services for the purpose of making a profit.

7. Why business is considered an economic activity?

Business is called an economic activity because the sole purpose of starting a business is to earn a livelihood and also to earn profit from the activity. Therefore, it is considered an economic activity.

8. State the meaning of business.

Business is the business where people engage themselves in activities that relate to the purchase or production and sale of goods and services with the sole purpose of making a profit, and therefore produce or sell goods and services that are in demand .

9. How would you classify business activities?

Business activity can be classified as:

1. Industry
2. Commerce

Industry: It includes activities that relate to the processing of raw materials to shape it into the final product. The role of an industry is to provide value to raw materials so that it can be used by end users (consumers). Industries are classified as primary, secondary and tertiary based on their performance. Commerce: It mainly deals with trade and related activities. It involves the exchange of goods and services. Commerce deals with two types of activities: subsidiary to trade and trade. When goods are bought and sold, it is referred to as trade and subsidiaries, including banking, transportation, advertising, communications. Commerce provides the necessary link that must exist between producers and consumers.

10. What are the various types of industries?

Industries can be broadly classified into three types:1. Primary Industries: These types of industries focus on obtaining raw materials and examples are mining, fishing and farming.2. Secondary industries: Such industries are mainly associated with raw materials with manufacturing goods and include car, steel and electronics industries.3. Tertiary Industries: These industries provide services and support to primary and secondary industries and for business related activities.

11. Explain any two business activities which are auxiliaries to trade.

Activities that facilitate the exchange of goods and services are known as subsidiaries for trade. Two examples are:1.      Banking and Finance: Funds are necessary to acquire assets, purchase raw materials and meet other expenses. These funds can be obtained from any bank. Therefore, banking helps in business activities to meet the required funds.2.      Advertising: This is an important component of marketing that involves the promotion of products, and accurate promotion only helps to reach a potential audience that will result in sales.

12. What is the role of profit in business?

Profit is the only purpose for which trade is done. A business will not last long without profit. In order for a business to operate on a regular basis, a portion of the profit needs to be recreated. It helps in the development of business. The role of profit in a business is that it is necessary for the business to expand.

13. What is business risk? What is its nature?

Business Risk, the term referred to as the possibility of earning insufficient profit or loss due to unforeseen or unforeseen circumstances. This can occur when demand for a particular product decreases due to increased competition or changes in customer preferences.The nature of business risks are:1.      Risks Related to Risk: Gains are derived as benefits for the risk taken in the business.2.      The degree of risk depends on the scale of business operations3.      Risk is an essential part of any business.4.      Business risk arises due to uncertainties in business.

Long Questions

1. Discuss the development of indigenous banking system in Indian subcontinent.

The indigenous banking system played a major role in funding with the help of currency and later in financing domestic and international trade with letter of credit. As the banking system developed, people started depositing precious metals with individuals who were known as Seth. Money became the instrument that producers could use to produce more goods. Later, documents were used in the form of hundi and chitti to conduct monetary transactions. In ancient India, intermediaries played a major role in promoting trade. The financial security offered by them helped in taking risks in foreign trade. Institutions like Jagat Seth also made considerable impact during the time of the Mughals and later in the East India Company. Availability of credit and increase in loan transactions helped the growth of business establishments.India achieved a greater balance of trade with exports than imports. This system helped manufacturers, traders and traders obtain funds for expansion and development. Industrial and commercial banks evolved to become finance trade and commerce, agricultural banks that provided short and long-term loans to finance those involved in agricultural activities.

2. Define business. Describe its important characteristics.

Business is the business where people engage themselves in activities that relate to the purchase or production and sale of goods and services with the sole purpose of making a profit, and therefore produce or sell goods and services that are in demand .Business features are:1. Business is considered an economic activity because the sole purpose of starting a business is to earn profit.2. Business deals with the purchase of raw materials and converting them into finished products and selling them to consumers3. Continuity and future growth of the business is determined by the profit it is earning.4. Business involves the exchange of goods and service using a common medium i.e. money.5. Any business whether small or big, business will face risk6. There will be uncertainty of returns as the business may lose or gain.

3. Compare business with profession and employment.

4. Define industry. Explain various types of industries giving examples.

Industry refers to the economic activities that result in the conversion of resources into useful commodities. Includes the use of machines and technical skills used to produce a wide variety of goods, breeding animals. There are three types of industries:1. Primary Industries: These types of industries deal with products which are derived from natural sources. The main objective of such industries is to convert raw materials into a form that can be consumable. Examples of such industries are farming, hunting, mining, fishing industries. Primary industries can be classified into two types based on the activities performed.a. Extractive Industries: These industries deal with products that need to be refined so that it can be used in some other industries. Examples are mining and fisheries.B. Genetic Industries: These industries deal with breeding plants and animals and use them for further use.2. Secondary industry: These industries are concerned with the manufacture of products, they acquire raw materials and convert them into goods to which further value can be added. These types of industries can be classified as follows:a. Manufacturing Industry: Here it becomes easily usable for converting raw materials into finished products like petroleum, wax which is obtained from mineral oil etc.B. Synthetic Industries: They combine raw materials to make a new product. Examples are the cosmetic industry.C. Processing Industry: Here the raw material is processed and purified to arrive at the final product. Examples are the paper and sugar industries.D. Assembling Industries: Combining different components to arrive at the final product is a specialty of assembling industries. Examples are electronics industry or automobile company or construction company.3. Tertiary industries: These industries serve as the facilitators of primary and secondary industries. These industries are mainly involved in providing service to industries, examples are baking, transportation.

5. Describe the activities relating to commerce.

There are two types of activities in commerce, 1. Trade and 2. Assistants for doing business.Buying and selling goods is called trade, while subsidiaries for trade include activities such as banking, communications, transportation and advertising. Commerce enhances the relationship between consumers and producers.Banking and Finance: This is the most important requirement for running any business. Free movement of goods without finance is prohibited. A banking system helps merchants in the availability of credit and thus acts as an assistant for trade.2. Warehousing: It refers to the storage of goods until it is ready to be carried. Warehousing ensures proper storage and facilitates easy availability of goods.3. Transportation: It helps the manufacturer in procuring goods and other essential items from different places and also sells it in different areas. It helps in buying and selling goods.4. Advertisement: Advertisements through various channels like radio, TV help to convey information to the audience and increase sales.5. Insurance: There will be risk in business and you have to get insurance to cover.

6. Explain any five objectives of business

Business objectives can be discussed as follows:

1. Maximum Profit: The only purpose of doing business is to earn profit. Growth potential can be determined by the ability to make a profit. Profit earned can be re-earned to earn more profit.2. Market Share: A business will compete and a business develops a stock market by staying ahead of competitors. Maximum market share can be captured by providing quality products at reasonable prices.3. Worker’s performance: If an employee is motivated and satisfied with his work, he will perform best in his work. A healthy work environment is required for workers to make a great contribution to this.4. Innovation: Innovation is the key to cutting costs while improving performance, and by doing so a business can stay ahead of its rivals.5. Social Responsibility: A business has certain responsibilities towards the society and these include removing poverty, unemployment and pollution etc. Fulfilling those responsibilities earns a business goodwill.

7. Explain the concept of business risk and its causes.

Business Risk, the term referred to as the possibility of earning insufficient profit or loss due to unforeseen or unforeseen circumstances. This can occur when demand for a particular product decreases due to increased competition or changes in customer preferences. Customer preferences are very difficult to determine because it is subject to change.There are two types of business risk ie net business risk and speculative business risk. a. Net business risk: In this type of risk, no loss or no loss is likely. Such risks may be associated with theft, various natural disasters and fires.B. Risk of speculative business: This type of risk has equal probability of making profit or loss, this type of risk arises due to change in government policy, competitor’s policy, price change or consumer preferences. There is business risk as discussed below:1. Economic Causes: This type of business risk arises due to uncertainty due to changes in competitors’ policy, price changes or consumer preference.2. Natural Causes: Natural disasters like floods, earthquakes and famines can cause widespread damage to a business. Such risks are beyond control.3. Human causes: These are due to negligence on the part of humans such as negligence, riots, attacks are some examples.4. Other reasons: There are some events that are unexpected such as political disturbances, interest and exchange rate fluctuations.

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

It is common for a business to examine all aspects before starting operations. Here are some important points to consider:

1. Line of business: It helps in determining the line of trade as it will help in building confidence.
2. Business scale: It determines the scale at which the business will be run.

3. Location: To establish a business, a location needs to consider the following factors such as cheap labor, availability of raw materials, good transport facilities, adequate power and infrastructural facilities.4. Finance: Business is affected at every step by finance, from the purchase of raw materials to the machinery and then to undertake the necessary investments for further development. Therefore, it is necessary to raise funds for business.5. Workforce Capability: A trained workforce is a pre-requisite to perform various business activities, so it is necessary to identify a skilled workforce before starting a business.6. Physical requirements of business: These include equipment, machinery and technology that enhance business efficiency. Therefore it should be chosen according to the nature and scale of the business.

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