EXERCIS
Short Answer Questions
1. Define the term 'business'.
2. Give two characteristics of business.
3. Distinguish between industry and commerce
4. What is extractive industry?
5. Define commerce.
6. What are aids to trade?
Answers
Answer:
Trade is selling and buying of goods and services between two or more parties in consideration of cash and cash equivalents. Commerce includes the exchange of goods and services along with activities viz. banking, insurance, advertising, transportation, warehousing, etc. to complement the exchange.
Answer: (i) As per Peterson and Plowman “Business may be defined as an activity in which different persons exchange something of value, whether goods or services, for mutual gain or profit.”
Or
Business is, “The state of being busy in making, distributing or providing of any goods or services which other members of the community need.”
(ii) Activity is the epicenter of human life.
(iii) Following are the characteristics of business:
(a) Economic activity
(b) Production
(c) Satisfaction of human want
(d) Regularity: In business, activity is performed on regular basis.
(e) Profit
(f) Risk.
(iv) Finished product in the form of a good or service is the final outcome of the industrial activity.
(v) (a) Home or internal trade (b) Foreign or external trade.
(vi) “Commerce is the sum total of all those activities, which are engaged in the removal of hindrance of persons (trade) place (transport and insurance) and time (ware housing) in the exchange (Banking) of commodities,”. James Stephenson