Chapter business-trade-and-commerce: Business, Trade and Commerce Case Study Questions | business studies Class 11 CBSE

Chapter business-trade-and-commerce: Business, Trade and Commerce Case Study Questions | business studies Class 11 CBSE | ByteNotes.in

Case Study

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Case Set 1

Case Analysis

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Ramesh is a young entrepreneur from a small town in Uttar Pradesh. After completing his schooling, he decided to open a grocery shop in his locality. He purchases goods from wholesale markets and sells them to local consumers on a daily basis. His shop operates six days a week. He earns profits from the difference between the buying and selling price. His goal is not just to earn money but also to serve the community by providing quality goods at reasonable prices. Recently, he has been thinking about expanding his business by adding a home-delivery service. He understands that running a business involves financial risks, market competition, and uncertainty of returns, but remains motivated by the possibility of growth and profit.

Question 1: Why is Ramesh's grocery shop considered a business activity?

It involves regular sale and purchase of goods on a daily basis.
It is carried out with the objective of earning profit.

Question 2: Which characteristic of business is reflected when Ramesh faces uncertainty about future profits?

The characteristic is 'Uncertainty of Return'.
It refers to the lack of knowledge about the exact amount of profit or loss that the business will earn in a given period.

Question 3: Identify and explain the objectives of business evident in Ramesh's case.

Profit earning: Ramesh earns profit from the difference between buying and selling price, which is essential for the survival of his business.
Market standing: He aims to serve the community with quality goods at reasonable prices, building a good reputation.
Innovation: He is planning to add a home-delivery service, showing innovation in services to grow the business.

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Case Set 2

Case Analysis

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Dr. Ananya Sharma is a qualified dentist who completed her degree from a reputed dental college. She has registered herself with the Dental Council of India and now runs her own clinic. She charges a professional fee from her patients. She follows a strict code of conduct prescribed by the dental council. She does not need heavy capital investment and her income is fairly regular. Her neighbour, Suresh, works as a branch manager in a nationalised bank and receives a fixed monthly salary. Another neighbour, Prakash, runs a small furniture manufacturing unit employing five workers and earns profit from selling his products. The three neighbours often discuss differences in their respective economic activities.

Question 1: Identify the type of economic activity each of the three neighbours is engaged in.

Dr. Ananya is engaged in Profession as she provides expert dental services and charges a professional fee.
Suresh is engaged in Employment as he works in a bank for a fixed salary.
Prakash is engaged in Business as he manufactures and sells furniture for profit.

Question 2: What is the basis of establishment for Dr. Ananya's profession as compared to Prakash's business?

For Dr. Ananya (Profession): Establishment requires membership of a professional body (Dental Council of India) and a certificate of practice.
For Prakash (Business): Establishment is based on the entrepreneur's own decision along with necessary legal formalities, without requiring membership in any professional body.

Question 3: Compare the three economic activities — business, profession, and employment — on the basis of risk, reward, and capital investment.

Risk: Business has uncertain and irregular profits with high risk; profession has some risk but fee is fairly regular and certain; employment has fixed and regular salary with little or no risk.
Reward: Business earns profit; profession earns professional fee; employment earns salary or wages.
Capital Investment: Business requires capital investment as per size and nature; profession requires limited capital; employment requires no capital investment.

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Case Set 3

Case Analysis

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Arjun decided to set up a sugar manufacturing unit in Uttar Pradesh after completing his MBA. He selected the location near sugarcane fields to ensure availability of raw materials. He approached a commercial bank to avail loans for purchasing machinery and meeting working capital needs. He also purchased an insurance policy to protect his factory building and machinery from fire and theft risks. He hired a transport company to move raw sugarcane from farms to the factory and finished sugar to wholesale markets across the country. He placed advertisements in newspapers and on social media to promote his sugar brand. He stored excess sugar in a warehouse during the off-season to sell when prices are favourable.

Question 1: Name the auxiliaries to trade used by Arjun in his business operations.

Banking (obtaining loans from commercial bank), Insurance (protection against fire and theft), Transport (moving sugarcane and finished goods), Warehousing (storing excess sugar), Advertising (promoting sugar brand).

Question 2: How does warehousing help Arjun's business? What type of utility does it create?

Warehousing helps Arjun by holding stocks of sugar during the off-season and making them available when demand and prices are favourable.
It creates time utility by bridging the gap between production and consumption and helps maintain prices at a reasonable level through continuous supply.

Question 3: Under which type and sub-type of industry does Arjun's sugar manufacturing unit fall? Justify your answer with the method of operation used.

Arjun's unit falls under Secondary Industry, specifically Manufacturing Industry.
Within manufacturing, it is a Processing Industry because sugar manufacturing involves successive stages of processing — extraction of sugarcane juice, purification, crystallisation, and packaging.
Secondary industries use materials extracted at the primary level (sugarcane from agriculture) and process them to create finished goods for consumption.

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Case Set 4

Case Analysis

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Meera runs a small boutique selling ethnic Indian clothes. One day, she sold her old personal laptop to a friend for ₹15,000 at a profit. She was excited and considered this a business transaction. Her commerce teacher, however, clarified that selling the laptop is not a business activity. Meera also helps elderly neighbours by stitching clothes for them free of cost on weekends out of sympathy. In her boutique, she regularly buys fabrics from wholesale markets and stitches and sells clothes to customers throughout the week. She employs two tailors and maintains records of income and expenses. Her boutique has been running for three years.

Question 1: Why is selling the laptop not considered a business activity, even though it was sold at a profit?

Business requires dealings in goods or services on a regular basis.
Selling the laptop was a one-time or single transaction and not done on a regular basis, so it does not constitute a business activity.

Question 2: Is Meera's act of stitching clothes for elderly neighbours free of cost an economic activity? Give reasons.

No, it is a non-economic activity because it is performed out of sympathy and love, not for the purpose of earning money or livelihood.
Economic activities are those undertaken to earn income, whereas non-economic activities are performed out of emotions like love, affection, or sympathy.

Question 3: Explain any three characteristics of business that are evident in Meera's boutique operations.

Regular dealings: Meera regularly buys fabrics and sells stitched clothes to customers throughout the week, making it a continuous activity.
Profit earning: She maintains records of income and expenses, aiming to earn profit from her boutique operations.
Element of Risk: She faces risks like changes in fashion trends, competition, and uncertainty about future demand and income.
Production or procurement of goods and services: She procures fabrics and produces stitched garments for sale, adding value through her service.

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Case Set 5

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During ancient times, Indian merchants were famous worldwide for their trade expertise. Ships from India carried spices, cotton, sugar, indigo, and live animals to distant lands like Rome, China, and Arabia. Merchants from Taxila and Pataliputra were involved in brisk trade along the Silk Route by land and maritime routes by sea. They used instruments called Hundi to transfer money safely between parties without carrying large amounts of cash, as travelling long distances involved serious risks of robbery and theft. India, during the 1st century AD, is estimated to have contributed nearly 32% of world wealth, making it the richest region at that time.

Question 1: What was the purpose of the Hundi in ancient Indian trade?

Hundi was used as a document to facilitate the safe transfer of money from one party to another without carrying physical cash.
It helped reduce the risk of theft and robbery during long-distance trade journeys by land and sea.

Question 2: Mention any two major export items of ancient India and name two important trade centres mentioned in the passage.

Major export items: Spices and Cotton (also sugar, indigo, live animals).
Important trade centres: Taxila and Pataliputra (Patna).

Question 3: How did ancient trading activities contribute to the economic development of India? Explain with reference to banking, infrastructure, and balance of trade.

Balance of Trade: India enjoyed a favourable balance of trade where exports exceeded imports by large margins, generating surplus income for the country.
Banking: The surplus generated was channelised into investment, leading to the growth of an indigenous banking system including instruments like Hundi and Chitties to finance trading activities.
Infrastructure: Trade led to the development of aids to trade such as transportation (Silk Route, maritime routes), banking, finance, and communication which improved trading prospects and prosperity of merchant communities.

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Chapter sections

Chapter business-trade-and-commerce: Business, Trade and Commerce | Case Study Questions

Passage

Question 1: Why is Ramesh's grocery shop considered a business activity?

Question 2: Which characteristic of business is reflected when Ramesh faces uncertainty about future profits?

Question 3: Identify and explain the objectives of business evident in Ramesh's case.

Passage

Question 1: Identify the type of economic activity each of the three neighbours is engaged in.

Question 2: What is the basis of establishment for Dr. Ananya's profession as compared to Prakash's business?

Question 3: Compare the three economic activities — business, profession, and employment — on the basis of risk, reward, and capital investment.

Passage

Question 1: Name the auxiliaries to trade used by Arjun in his business operations.

Question 2: How does warehousing help Arjun's business? What type of utility does it create?

Question 3: Under which type and sub-type of industry does Arjun's sugar manufacturing unit fall? Justify your answer with the method of operation used.

Passage

Question 1: Why is selling the laptop not considered a business activity, even though it was sold at a profit?

Question 2: Is Meera's act of stitching clothes for elderly neighbours free of cost an economic activity? Give reasons.

Question 3: Explain any three characteristics of business that are evident in Meera's boutique operations.

Passage

Question 1: What was the purpose of the Hundi in ancient Indian trade?

Question 2: Mention any two major export items of ancient India and name two important trade centres mentioned in the passage.

Question 3: How did ancient trading activities contribute to the economic development of India? Explain with reference to banking, infrastructure, and balance of trade.

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