SAHAY INSTITUTE

Chapter 1

Evolution and Fundamentals of Business

Multiple Choice Questions

Q. Gopal is a poor farmer. Whatever he produces he uses tor his family's

consumption and does not generate any market surplus to buy the seeds and
fertilizers He has taken loan from Agriculture heavy rainfall due Credit Society.
Because Storms his crop is totally destroyed. He suffered huge loss and to repay
the loan he has started working in Zamindar farm

Which of the following economic activity Gopal is engaged in?

(A) Business
(B) Employment
(C) Profession
(D) None of these

Q.2. Shreet is engaged in production of bicycles His son working as an engineer

and his daughter is working as manager in a reputed company.

Which of the following economic activities is Shreet and his son and daughter
engaged in?

(a) Shreet is doing business His son is a professional and his daughter is an
employee.
(B) Shreet is A professional. His son is doing business and his daughter is an
employee
(C) Shreet is an employee. His son is a professional and his daughter is doing a
business.
(d) None of these
Q.3. Ramuraj is a farmer and owns a big farm. He decides to grow cotton in that
farm. Sohail is a manager in a textile company. The company buys cotton from
Ramuraj and manufactures cotton clothes

Which of the following type of industry is Ramuraj engaged in ?

(a) Primary
(b) Secondary
(c) Tertiary
(d) All of the above

Q. 4. Among following given activities, which one is not an economic activity

(A) Social welfare

(B) Trading in goods and services
(C) Transportation services
(D) Manufacturing of goods for sale

Q.5. Business is considered to be an economic activity because:

(A) It is done out of love, affection, sympathy or any other emotion.

(B) It is undertaken with the objective of earning money or livelihood
(C) Both (A) and (B)
(D) None of these
.
Q. 6. Which of the following is not true about profit earning as an essential
objective of business?

(A) It is a source of income.

(B) It is a source of finance for meeting expansion requirements.
(C) It builds reputation of the firm.
(D) It does not indicate the efficiency of working of business.

Q.7. Giving reservation in jobs to specially-able persons is the example of which

business objective?

(A) Social responsibility (B) Innovation

(C) Market standing (D) Profit earning
Q.8. Archaeological evidences have shown that trade and commerce was the
mainstay of the economy of ancient India carried out by

(A) Water (B) Land

(C) Both (A) and (B) (D) None of these

Q.9 …………. merchants handled business in the northern region.

(A) Punjabi and Multani (B) Bhats

(C) Mahajan (D) All of the above R

R. 10. Arun has just passed his 10th standard and has opted for Business Studies
as his optional subject. During his initial classes regarding this subject he is not
able to understand the concept of business You being the teacher of this subject
explain to him any three characteristics of business.

(A) Economic Activity

(B) Uncertainty of Returns
(C) Profit Earning
(D) All of these

Q. 11. Manufacturing industries create which utility?

(A) Form
(B) Place
C)Time
(D) Possession

Q. 12. Which industry combines various ingredients into

a new product?

(A) Analytical industry

(B) Synthetical industry
(C) Processing industry
(D) Assembling industry

Q.13 ……………. trade refers to the import of goods for the purpose of export.
(A) Import (B) Export
(C) Entrepot (D) All of the above

Q. 14. Transport, banking, insurance, warehousing, communication, packaging

and advertising are included under which industry?

(A) Primary
(B) Secondary
(C) Tertiary
(D) None of these

Q.15.Cattle breeding farms, poultry farms and fish hatchery come under which
industry?

(A) Genetic (B) Extractive

(C) Manufacturing (D) None of these

Q. 16. Which industries include activities concerned with the extraction and
production of natural resources and reproduction and development of living
organisms?

(A) Primary
(B) Secondary
(C) Tertiary
(D) None of these

Q. 17. Monica Khanna is a jewellery designer. She started her career from
scratch and took advanced designing course at Jewellery Product Development
Center. On the completion of the course she got the job at Gitanjali Gems. Being
an experienced jewellery designer, Monica Khanna focuses on maintaining the
originality and creativity of the ornaments that are custom designed and
developed by her.

Identify the economic activity Monica is engaged in.

(A) Business
(B) Employment
(C) Profession
(D) None of these
Q.18. Auxiliaries to trade play a ……………… role for trade and industry.

(A) Non-essential (B) Supportive

(B) Unsupportive (D) Negative

Q.19. Which of the following is correct about speculative risks?

(A) Involves the possibility of only loss.

(B) Involves the possibility of only gain.
(C) Involves the possibility of either gain or loss.
(D) Involves the possibility of neither gain nor loss.

Q.20. "Risk is an essential part of every business.

(A) The statement is true

(B) The statement is false
(C) Depends on the business activity
(D) None of these

Q.21. Which of the following is a factor in determining the degree of risk

involved in a business?

(A) Only nature of the business

(B) Only size of the business
(C) Both nature and size of the business
(D) Neither nature nor size of the business

Q.22. Which of the following is not a natural cause of business risks:

(A) Earthquake
(B) Flood
(C) Strikes
(D) Famine

Q.23. Which of the following is not an economic cause of business risks:

(A) Interest rate fluctuations

(B) Change in technology
(C) Negligence of employees
(D) Higher taxes

Q. 24. Which of the following is not a method of dealing with risks:

(A) Taking insurance policy

(B) Taking preventive measures
(C) Making provisions in current earnings
(D) All are methods of dealing with risks

Q.25. Which type of business risk results only in losses or no profits to the
business?

(A) Only Speculative risks

(B) Only Pure risks
(C) Both Speculative and Pure risks
(D) Neither Speculative nor Pure risks

0. 26. Match the different manufacturing industries with their suitable

examples.

Column 1 Column 2
1. Analytical Industry (i) Cement
2. Synthetic Industry (ii) Television
3. Processing Industry (iii) Oil Refinery
4. Assembling Industry (iv) Sugar

(A) 1. (i), 2. (iii), 3. (iv), 4. (ii)

(B) 1. (iii), 2. (i), 3. (iv), 4. (ii)
(C) 1. (iv), 2. (i), 3. (iii), 4. (ii)
(D) 1. (iii), 2. (i), 3. (ii), 4. (iv)

R. 27. Match the following services to trade with the hindrances which they
remove.

Column 1 Column 2
1. Transpot (i) Information
2. Insurance (ii) Storage
3. Warehousing (iii) Place
4. Advertising (iv) Person

(A) 1. (iv), 2. (iii), 3. (ii), 4. (i)

(B) 1. (iii), 2. (ii), 3. (iv), 4. (i)
(C) 1. (iii), 2. (iv), 3. (ii), 4. (i)
(D) 1. (iii), 2. (iv), 3. (i), 4. (ii)

Q.28. Match the types of trade with their meanings.

Column 1 Column 2
1. Wholesale trade (i) Selling outside the country
2. Retail Trade (ii) Buying and selling in bulk
3. External Trade (iii) Buying and selling in small quantity
4. Export Trade (iv) Buying and selling goods outside
the country

(A) 1. (ii), 2. (iii), 3. (i), 4. (iv)

(B) 1. (ii), 2. (iv), 3. (iii), 4. (i)
(C) 1. (iii), 2. (ii), 3. (iv), 4. (i)
(D) 1. (ii), 2. (iii), 3. (iv), 4. (i)

Q.29. Match the following causes of risk with their related examples

Column 1 Column 2
1. Strike by workers (i) Economic Cause
2. Loss by earthquake (ii) Human Cause
3. Fall in demand (iii) Natural Cause

(A) 1. (ii), 2. (iii), 3. (i)

(B) 1. (iii), 2. (ii), 3. (i)
(C) 1. (ii), 2. (i), 3. (iii)
(D) 1. (i), 2. (iii), 3. (ii)

Q.30. Match the type of industry with the correct example.

Column 1 Column 2
1. Tertiary Industry (i) Paper Industry
2. Extractive Industry (ii) Banking
3. Processing Industry (iii) Mining

(A) 1. (ii), 2. (iii), 3. (i)

(B) 1. (iii), 2. (ii), 3. (i)
(C) 1. (ii), 2. (i), 3. (iii)
(D) 1. (i), 2. (iii), 3. (ii)