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SEBA Class 9 An Introduction to Commerce Chapter 1 Foundation of Business
Also, you can read the SCERT book online in these sections Solutions by Expert Teachers as per SEBA (CBSE) Book guidelines. SEBA Class 9 An Introduction to Commerce Chapter 1 Foundation of Business Notes. These solutions are part of SCERT All Subject Solutions. Here we have given Elective An Introduction to Commerce Class 9 SEBA Solutions for All Chapters, You can practice these here.
Foundation of Business
Chapter – 1
| UNIT – I BUSINESS STUDIES |
| Questions |
1. What do you mean by Human Activities? Write different classification of Human Activities.
Ans: Human activities refer to the various tasks, actions, and behaviors carried out by humans to fulfill their needs and desires. These activities are influenced by physical, social, economic, and cultural factors. They can be broadly divided into two main categories: those aimed at earning a livelihood and those undertaken for personal satisfaction or well-being.
Different classification of Human Activities:
(i) Economic Activities: The activities which are undertaken to earn money for livelihood and derive monetary benefits are called economic activities.
For example: operating business, working in company, selling products etc.
(ii) Non-economic Activities: The activities which are not related to earning money or not engaged with any type of economic activities, are called non-economic activities. Such activities are undertaken to fulfill personal or psychological satisfactions.
For example: Mediation, love, pleasure, etc.
2. What do you mean by Economic Activities and Non-economic Activities? Write with examples.
Ans: (i) Economic Activities: The activities which are undertaken to earn money for livelihood and derive monetary benefits are called economic activities.
For example: operating business, working in company, selling products etc.
(ii) Non-economic Activities: The activities which are not related to earning money or not engaged with any type of economic activities, are called non-economic activities. Such activities are undertaken to fulfill personal or psychological satisfactions.
For example: Mediation, love, pleasure, etc.
3. What do you mean by Business? Write the characteristics of Business.
Ans: Business refers to the process of purchase and sale of goods & products and earning profit out of this process. In broader sense, business is the sum total of all the activities which starts right from the production of goods & services down to the task of taking them to the customers.
Characteristics of Business:
(i) An Economic Activity: Business includes only economic activities. Economic activities mean the exchange of goods and services with the purpose of earning money. For example: sale of products by a shopkeeper.
(ii) Exchange of Goods and Services: For business, the exchange of goods or services is essential. It means, if an individual purchases a product for his personal use, this activity is not called business, as it is a personal expenditure, not business expenditure. But if he purchases the same product for selling it through his shop, then it will be business.
(iii) Regularity in Dealing: Business is an economic activity which is done regularly, i.e. purchase-sale should be regularly done. For example: a person sells his old refrigerator and purchases a new one, here the purchase-sale activity does take place but in the absence of regularity, this transaction cannot be called business.
(iv) Profit Motive: The main purpose behind a business is to earn profit. In order to consider any purchase-sale as business, it is essential that the purpose of the person concerned is to earn profit. But sometimes effort to earn profit can result in some loss. But, it cannot be said that in case of loss it will not be considered as business.
(v) Risk: Risk means uncertainty in outcomes. More or less each & every type of business involves risk. It means that there are problems and these can be the source of loss. A business does not mean always profit, it may also incur the loss some time. The probability of loss referred to the amount of risk. Hence, profit and loss go hand in hand in business like ups and downs in life.
4. What is a Profession? What are its characteristics?
Ans: Profession refers to an economic activity with the help of specialized or expertise knowledge of any individual of any kind.
Characteristics of Profession are mentioned below:
(i) Specialized Knowledge and Technique: The most important feature of a profession is that a profession should have specialized knowledge and technical Skill.
(ii) Training and Experience: There should be a provision for training and experience in a profession. It means only that human activity can be called profession the knowledge of which is imparted by some institution.
(iii) Establishment of Representative Professional Association: The third characteristic of profession is that it must have a representative professional association which performs the following functions:
(a) To regulate the behavior of its members.
(b) To create a code of conduct for guiding the activities of the profession.
(c) To build up and promote the image of its members as a professional.
(d) To prescribe minimum qualification of its members.
(e) To regulate entry to profession.
(iv) Code of Conduct: Members of a profession are bound to follow a code of conduct. Code of conduct includes rules & regulations connected which the profession, honesty, integrity, morality, etc.
(v) Priority of Services over Economic Consideration: Like other business activities, adopting a profession is a mean of earning money. On the basis of a specialized knowledge, one gets proper remuneration for rendering service in the profession. That’s why; professionals are respected in the society.
5. What do you mean by Employment? Write the different characteristics of Employment.
Ans: Employment is an economic activity under which people work for others and receive remuneration in lieu thereof. The remuneration can be in form of salary, wages, etc. The employer can be the govt., enterprise or any private organization. Employment may be on permanent, temporary or casual basis. Some of the example of employment are-managers, surveyors, laborer’s, clerks etc.
Characteristics of Employment:
(i) Service to Others: The first important feature of employment is providing services to others.
(ii) Personal Service: It is service for herself/ for himself.
(iii) Agreement: Employment is obtained under a special contract or agreement. The basis of employment, (permanent, temporary or casual) is entered in the contract between the employer and employee.
(iv) Servant: An employee is a servant of his master or employer and acts according to his order and instructions.
(v) No need of Capital: No capital is required in employment. In other words, the capital is contributed by the owner or employer, not by the employee.
6. What do you mean by Industry?
Ans: Industry includes all those activities involved in making a particular product or providing a particular service.
7. Elaborate the different types of Industry.
Ans: The different types of Industry are mentioned below:
(i) Primary Industry: The primary industry includes all those activities through which the natural resources are used to provide raw materials to other industries.
The primary industries are of two types:
(a) Genetic Industry: The genetic industry refers to those industries under which the breed of animals and vegetables are improved and made more useful. They include animal husbandry, poultry, tree planting, etc.
(b) Extractive Industry: Extractive industry refers to those industries under which some thing is extracted out of the earth, water or air. For Example, coal, iron, natural gas, etc. are extracted from the earth; stone is taken out of the quarries, food grains and other products are obtained from agriculture.
(ii) Secondary Industry: Under the secondary industry, new products are manufactured by using the previously produced things. For example, producing cotton is a primary industry and manufacturing cloth out of cotton is a secondary industry.
The secondary industry is of two types:
(a) Manufacturing Industry: The manufacturing industry means those industries where raw materials and semi-finished material are used with the help of man and machine to bring out the finished goods. For example, steel from iron-ore, sugar from sugar-cane, paper from bamboo, cement from stone, etc.
(b) Constructive Industry: Under these industries, constructive works are done by using the things produced by other industries. For example- by using cement, iron, bricks, wood etc. buildings, bridges, roads, dams, etc. are constructed. These industries produce things which are permanent in nature and they are used mostly for public welfare.
8. What do you mean by Commerce?
Ans: Business is an economic activity which starts with production and ends with consumption. A long and difficult way has to be created in taking the finished products from the place of production to the place of consumption. The work of production falls within the jurisdiction of industry, while the remaining activity belongs to commerce. This process begins in this way. First of all, the wholesale dealer purchases the finished product from the factories. Later on, the same products are purchased by the retailers. The last step in this process is the sale of this product to the consumers.
9. Explain the components of Commerce.
Ans: On the basis of the definitions of commerce, it can be divided into the following two parts:
(i) Trade: Trade can be carried on the smallest as well as the largest scale. For example, if any individual sells his goods on the handcraft, it is also trade. Small shops being run in the streets are also a part of trade. On the other hand, the big show rooms in the market, departmental stores, etc. Too are an integral part of trade. This trade carried on from the local level, to the state level, the national level and the international level.
(i) Home Trade: When the buying and selling of goods & services takes place within the national boundaries, it is called home trade.
The types of home trade are as under:
(a) Local Trade.
(b) State Trade.
(c) Inter-state Trade.
(ii) Foreign Trade: The conduct of trade between two or more countries is called foreign trade. The importance of foreign trade is increasing every day. The reason behind is that, no single countries can produce all goods & services it requires. Hence,it has to depend on other countries for goods & services needed.
Foreign trade has three parts:
(a) Import Trade.
(b) Export Trade.
(c) Entrepot Trade.
10. What is Auxiliaries to Trade? Write different Auxiliaries to Trade.
Ans: Commerce includes not only trade but also various other auxiliaries or aids or subsidiary activities. All those activities which are undertaken to overcome the hurdles appearing in the way of trade are called aids to trade. Auxiliaries to trade are those activities which facilitate business. Transport, Banking, Insurance, Warehousing, Advertising, etc. are regarded as auxiliaries to trade.
Various types of auxiliaries to trade are as follows:
(a) Middlemen: There are limited numbers of producers of any product while the consumers are unlimited. Hence, it is not possible for consumers to purchase goods directly from producer. This is the first problem in sale and purchase of goods which is called Hindrance of Persons. To establish contacts between producer and consumer, middlemen are required. Middlemen consist of wholesaler, retailer, etc.
(b) Transport and Communication: Producers and consumers are far away from each other geographically. Hence, there is one more hindrance in trade that how to transport the goods from production place to consumption place. This hindrance can be eliminated by transport. The other aspect of hindrance of place is that producers and purchasers are scattered. This problem can be solved by communication. Means of communication like telephone, telegram, letter, telex, etc. helps in finalizing the business deals.
(c) Warehousing: There is a big gap of time between manufacturing of any product and consumption of that product. The reason is that the product is manufactured during a specific season while consumption takes place throughout the year.
