Class 11th Chapter 1 Nature and Purpose of Business |Most Important Questions | Business Studies Class 11

Nature and Purpose of Business Class 11 Important Questions Business Studies Chapter 1

Q1. Differentiate between Economic and Non-economic activities.
Answer:
Distinction Between Economic And Non-Economic Activities:

Basis	Economic Activities	Non-Economic Activities
1. Meaning	These activities are undertaken by people to earn income to meet their material needs.	These activities are of social and religious nature and do not generate any economic gain.
2. Purpose/Motive	These activities are undertaken with economic motives, for the generation of income and wealth to earn a living.	These activities are undertaken by social or psychological motives. The basic purpose is to serve other segments of society.
3. Need Satisfaction	These satisfy the economic needs of people engaged such as food, clothing, shelter, etc.	These satisfy the social and psychological needs of people engaged.
4. Types of Examples	People engaged in economic activities include traders. Manufacturer. Teacher. Doctor. Electrician. Worker, etc.	People engaged in household activities, charitable work, social work, the welfare of the poor. etc. are said to be engaged in non¬economic activities.
5. Logic	These activities are guided by rational considerations of cost and profits.	Sentiments and emotions guide these activities.

Q2. Explain the difference between Industry, Commerce, and Trade.
Answer:
Difference between Industry, Commerce, and Trade:

Points of Difference	Industry	Commerce	Trade
1. Meaning	It relates to the production of goods and services.	It relates to the distribution of goods and services.	It relates to the actual purchase and sale of goods.
2. Capital	It requires a huge amount ’ of fixed and working capital for production	It requires limited fixed capital but huge working capital.	It requires small capital as per turnover.
3. Scope	It covers genetic, manufacturing, and constructive industries.	It covers trade and auxiliaries to trade.	Does it include? ‘Mental and external trade
4. Basis	It is the basis of modern business.	Its basis is industries and professions.	it is based upon commerce.
5. Utility	Goods are produced by transforming forms, creating form utility.	Goods are produced by a change of place or by storing. Creating place utility.	Goods are produced by transferring their possession, thus creating possession utility.
6. Place of work	Industries are established at a particular place. It may be a work-shop or factory.	Here, goods are transferred from one place to other places	The market is the place where trading activities are performed.

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