Nature and purpose of business

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Multiple choice questions.

1. Economic activities are undertaken with an ___________ motive.

  • economic 
  • non economic
  • profit
  • both profit & non-profit
Answer : A
These activities are manly undertaken with a view of gaining profit and economic resources.

2. Which is not a characteristics of economic activity from below options?

  •  Wealth producing
  • satisfying human wants
  • developmental activity
  • self satisfaction
Answer : D
Self-satisfaction is the characteristics of non-economic activities.

3. Fisher gives how many objectives for economic activities?

  • A.   2
  • B.   3
  • C.   4
  • D.   None of these

Answer: A

Fisher gives two objectives, named as 1) proper allocation of resources 2) optimum use of resources.

4. The resources should be put to their _________ use.

  •     A.   Limited
  •     B.   Unlimited
  •     C.   Maximum
  •     D.   Optimum

Answer: D

Economic resources should be put to their optimum use. Then only best result can be derived.

5. Economic Activities are backed by _________ philosophy and non-economic activities are backed by _________ philosophy.

  • A. Idealistic, Pragmatic 
  • B. Pragmatic, idealistic
  • C. Realistic, social 
  • D. none of these
Answer: B

6. How many  types of economic activities are there?
  • A. 2
  • B. 4
  • C. 3
  • D. None of these
Answer: 3 
Economic activities may be classified as 3 types, namely Profession, Business and Employment.

7.  The possibilities of inadequate profits or even losses due to uncertainties are known as ____________.

(a) Business contingencies

(b) Business risks

(c) Business ventures

(d) None of these

Answer: (b) Business risks

8. Business risk is not likely to arise due to _____.

(a) Changes in government policy

(b) Good management

(c) Employee dishonesty

(d) Power failure

Answer: (b) Good management

9. Name the two broad categories of business activities.

(a) Trade and Commerce

(b) Trade and Industry

(c) Industry and Commerce

(d) None of these

Answer: (c) Industry and Commerce

10. The industries which provide support services to other industries are known as _____.

(a) Primary industries

(b) Secondary industries

(c) Commercial industries

(d) Tertiary industries

Answer: (d) Tertiary industries

11. ‘Earning of profit is considered to be the subsidiary objective of the business.’ The given statement is _____.

(a) True

(b) False

(c) Cannot say

(d) None

Answer: (b) False

12. The occupation in which people work for others and get remunerated in return is known as _____.

(a) Business

(b) Profession

(c) Employment

(d) None of these

Answer: (c) Employment

13. Transfer of interest exists in the case of _____.

(a) Profession

(b) Employment

(c) Business

(d) None of these

Answer: (c) Business

14. Which of the following does not characterise business activity?

(a) Production of goods and services

(b) Presence of risk

(c) Sale or exchange of goods and services

(d) Salary and wages

Answer: (d) Salary and wages

15. Which of the following is not an example of non-economic activity?

(a) Patriotism

(b) Teaching

(c) Sentiment

(d) Sympathy

Answer: (b) Teaching

16. Economic activities may be classified into business, ___________ and employment.

(a) Profession

(b) Occupation

(c) Vocation

(d) Work

Answer: (a) Profession

17. Which of the broad categories of industries covers oil refineries and sugar mills?

(a) Primary

(b) Secondary

(c) Tertiary

(d) None of these

Answer: (b) Secondary

18. Following are the characteristics of business risks. One of them is not correct. Please identify it.

(a) Loss is the reward for risk-bearing

(b) Business risks are due to uncertainties

(c) Risk is an essential component of every business

(d) Degree of risk depends mainly upon the nature and size of business

Answer: (a) Loss is the reward for risk-bearing

19. Which one of the following may not be a factor behind starting a business?

(a) Routine workload

(b) Size of the firm

(c) Finance

(d) Location of the business

Answer: (a) Routine workload

20. Commerce includes activities relating to trade and ___________ to trade.

(a) Supporting

(b) Subsidiaries

(c) Auxiliaries

(d) None of these

Answer: (c) Auxiliaries

21. Which of the following cannot be classified as an objective of a business?

(a) Investment

(b) Productivity

(c) Innovation

(d) Profit earning

Answer: (a) Investment

22. Commerce includes activities relating to trade and

(a) Auxiliaries

(b) Subsidiaries

(c) Supporting

(d) None of the above

Answer: (a) Auxiliaries to trade..

23. Bad debts due to non-payment of debt by the debtor are an example of which type of business risk?

(a) Human

(b) Natural

(c) Physical

(d) Economic

Answer: (a) Human

24. Which of the following is an economic cause of business risks?

(a) Demand for goods

(b) Competition

(c) Price

(d) All of the above

Answer: (d) All of the above

25. Business risk is not likely to arise due to

(a) Failure

(b) Employee dishonesty

(c) Changes in government policy

(d) Good management

Answer: (d) Good management

26. The word marketing standing is concerned with

(a) Position of an enterprise

(b) Supply of the product

(c) Customers

(d) Competitors

Answer: (a) Position of an enterprise

27. Why a business should earn a profit?

(a) To provide a return to investors

(b) To increase the reputation of the business

(c) To provide funds for future growth

(d) All of the above

Answer: (d) All of the above

28. Which one of the following is not an Auxiliary to trade?

(a) Mining

(b) Warehousing

(c) Insurance

(d) Transport

Answer: (a) Mining

29. Which of the following is not a natural cause of business risks?

(a) Earthquake

(b) Strikes

(c) Famine

(d) Heavy Rains

Answer: (b) Strikes

30. Which of the following is not concerned with the profession?

(a) Manufacturing goods and services

(b) Specialised body of knowledge and skill

(c) Code of conduct

(d) Formal Training

Answer: (a) Manufacturing goods and services

31. Which of the broad categories of industries covers oil refinery and sugar mills?

(a) Primary

(b) Secondary

(c) Tertiary

(d) None of the above

Answer: (b) Secondary

32. Which of the following is an instrument exchange, which was prominent in the subcontinent?

(a) Copper

(b) Hundi

(c) Gold

(d) Silver

Answer: (b) Hundi

33.The occupation in which people work for others and get remunerated in return is known as:

(a) Profession

(b) Employment

(c) Business

(d) None of the above

Answer: (b) Employment

34.The industries which provide support services to other industries are known as

(a) Primary industries

(b) Commercial industries.

(c) Tertiary industries

(d) Secondary industries

Answer: (c) Tertiary industries

35. Which one of the following is an economic activity in which specialised knowledge is required?

(a) Profession

(b) Business

(c) Employment

(d) None of the above

Answer: (a) Profession

36. The term business is derived from the word

(a) Buy and selling

(b) Financial markets

(c) Busy

(c) Proprietorship

Answer: (c) Busy

37. Which of the following is not a characteristic of business activity?

(a) Wages

(b) Sale of product

(c) The factor of risk

(d) Manufacturing goods and services

Answer: (a) Wages

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