Free Small Business 02 Practice Test - 11th Grade - Commerce
Question 1
Government subsidy of ___ is provided to the small businesses for building capital assets.
20-25%
5-10%
10-15%
50-75%
SOLUTION
Solution : C
Government subsidy of 15-20% is provided to the small businesses for building capital assets.
Question 2
Which are the indirect challenges for small businesses that arise from global competition?
Outdated technology
Labour
Procuring good quality raw materials
Marketing
SOLUTION
Solution : A, C, and D
Due to the global competition, small businesses find themselves lagging behind in technology. Since they don't have enough funds, they end up with no managers, and lack access to good quality raw materials.
Question 3
Sita opened a small stationery shop in her town. However, she figures the need to hire middlemen to take care of the marketing aspect in order to get her business known and earn more customers. Even then she realizes that it is a challenge. Why?
Middlemen charge an exorbitant fee for marketing
Difficult to find middlemen
Inadequate education among the existing middlemen
No challenges are faced
SOLUTION
Solution : A
Even after Sita hires middlemen for her marketing needs, they charge an exorbitant fee for doing so. This leads to a huge reduction in her revenues earned.
Question 4
Marketing
Finance
Global competition
Credit history
SOLUTION
Solution : B
When there is a shortage of funds, it will eventually lead to other challenges as mentioned.
Question 5
Which of the following is closely interlinked with the challenge of capacity utilisation?
Outdated technology
Marketing
Lack of skilled labour
Managerial skill
SOLUTION
Solution : A and C
Due to outdated technology and inefficient labour, small businesses face the issue of capacity utilisation.
Question 6
In the case of Chandra, we saw she incurred very high production costs using handloom as compared to the mechanized powerloom. Apart from the costs, which of the following factor(s) are impacted due to outdated technology?
Productivity
Managerial skill
Competency
None of the above
SOLUTION
Solution : A and C
Using handloom directly impacted the productivity and competency of Chandra's business since the powerloom works 10 times faster than handloom.
Question 7
Access to credit is a challenge for small businesses from both formal and informal sources.
True
False
SOLUTION
Solution : A
Access to credit through formal source is almost impossible for small businesses as they lack guarantee and creditworthiness. Whereas, informal sources charge a very high interest fee on credit. Either way, small businesses face challenge to access credit.
Question 8
Small businesses are registered with the government by filling a simple form called as
SOLUTION
Solution :Small businesses are registered with the government by filling a simple form called as 'Udyog Aadhaar Memorandum' (UAM).
Question 9
Which of the following is NOT an incentive provided by the government for small businesses?
Loans sanctioned at lower rates
Tax holiday
Power at a concessional rate
Water charges exempted forever
SOLUTION
Solution : D
Water charges are exempted for 5 years or supplied at a 50% concessional rate.
Question 10
Which of the following highlight the benefit(s) of clusters?
Procuring raw material for free of cost
Sharing common amenities like internet, training centers
Fetching optimum price by collectively selling the output
Depends on the numbers of enterprises
SOLUTION
Solution : B and C
Options B and C highlight the benefits of clusters. There is economies of scale in procuring raw material.