Question

Which of the following statements are True and which are false?
(i) Self employment means engaging in any economic activity on one’s
own.
(ii) There is no limit to earning in wage employment.
(iii) Some amount of capital is needed even when a person provides
individualized service for a price.
(iv) Self-employment in business involves risks of loss to be borne by the
owners.
(v) A goldsmith cannot be self-employed as he has to work under a jeweller

Answer 1

Answer:

Self-employment in business involves risks of loss to be borne by the

owners.

Answer 2

Answer:

(i) 'Self-employment' means 'engaging in any economic activity' on one’s own' - True

(ii) 'There is 'no limit to earning in 'wage employment.' - False

(iii) 'Some amount of capital is needed even when a 'person provides individualized service' for a price'. - True

(iv) 'Self-employment' in business involves 'risks of loss to be borne by the owners'. - True

(v) 'A goldsmith' cannot be self-employed' as he has to work under a jeweler.' - False

Explanation:  

• Self-employed means the individual is working to generate revenue for his own self through work.
• In wage employment, there is always a limit and in order for an employee to cross that, he or she needs to get promoted. Even if a person is self-employed, he needs to have some amount of capital to start his services.
• Namely, for a person to start a small food delivery service of his own, he needs capital to buy the basic amenities and ingredients and spend money on promotion.
• Generally, when a business incurs a loss, the business is considered as a separate entity and the losses are borne by that entity from its assets. However, the losses impact the business owners as well in case the business is declared bankrupt.
• A goldsmith can be self-employed as he can choose his own work and designs and not necessarily has to work under a jeweler.