Free Nature and Purpose of Business 03 Practice Test - 11th Grade - Commerce 

Question 1

Mr.Ronald owns a shoe store. He has 50 employees working for him. He buys the leather from suppliers, gets them stitched and designed from outside, and sells them at his store. The customers were happy with the quality of shoes they purchased and visited the store frequently.

What are the characteristics that can be seen from the above passage?

A.

1. An economic activity

2. Uncertainty of returns

B.

1. Production or procurement of goods and services

2. An economic activity

C.

1. An economic activity

2. Production or procurement of goods and services

3. Sale or exchange of goods and services for the satisfaction of human needs

D.

1. An economic activity

2. Sale or exchange of goods and services for the satisfaction of human needs

SOLUTION

Solution : C

From the above passage, the following business activities can be seen: 
1. An economic activity

2. Production or procurement of goods and services

3. Sale or exchange of goods and services for the satisfaction of human needs

Question 2

Trade is buying and selling of goods and services. 

A.

True 

B.

False

SOLUTION

Solution : A

True. Trade is the buying and selling of goods and services. 

Question 3

Risk is not an essential part of a business. 

A.

True 

B.

False

SOLUTION

Solution : B

False. Risk is an essential part of a business. Business risks arise because of uncertainties. 

Question 4

Risk are caused by ______ or ___ causes

A.

natural, human, capital 

B.

natural, human, economic

C.

natural, human, political

D.

natural, human, civil

SOLUTION

Solution : B

Risk are caused by natural, human or economic causes. 

Question 5

Raj Pal is a hardworking man, he is putting a lot of efforts in his new startup company. What kind of economic activity is he following? 

A.

Business

B.

Profession 

C.

Employment 

D.

None of the above

SOLUTION

Solution : A

Raj Pal is a businessman. The economic activity that he is following is business. Business refers to those economic activities, which are connected with the production or purchase and sales of goods or supply of services with the objective of making profits. 

Question 6

Rita has special knowledge and skill that she applies in her occupation. Is she an employee of a big firm? 

A.

True

B.

False

SOLUTION

Solution : B

False. Rita is engaged in a profession, which requires an application of special knowledge and skill.

Question 7

Sita's mother takes care of the household errands. What kind of activity is she performing? 

A.

Economic activity

B.

Non- economic activity

C.

Both of the above 

D.

None of the above 

SOLUTION

Solution : B

Sita's mother takes care of the household errands. She is performing a non-economic activity. 

Question 8

 Market standing refers to the position of an enterprise in relation to its competitors.

A.

True 

B.

False

SOLUTION

Solution : A

True. Market standing refers to the position of an enterprise in relation to its competitors. A business enterprise must have a strong standing in terms of offering competitive products to the customers and also serve them to their satisfaction. 

Question 9

The occupation where people work for others and receive a remuneration in return is known as _______________.

A.

Business

B.

Employment

C.

Profession

D.

None of the above

SOLUTION

Solution : B

The occupation where people work for others and receive a remuneration in return is known as employment.

Question 10

The degree of risk does not depend mainly on the nature and size of the business. 

A.

True

B.

False

SOLUTION

Solution : B

False. The degree of risk does depend mainly upon the nature and size of the business.