Chapter Exam

Chapter 1: Business Trade and Commerce — Online MCQ Test

Q: A business person buys goods in bulk from one state and sells them in another state. This activity is mainly called:

Answer: B. Trade — Trade means buying and selling of goods for profit. Since the person is purchasing and reselling goods, it is a trade activity.

Q: Which of the following is the best example of a business risk caused by natural factors?

Answer: C. Loss due to flood destroying stock — Natural factors such as floods, earthquakes, and cyclones can damage business assets and stock. Flood destroying stock is therefore a natural business risk.

BUSINESS STUDIES · CLASS 11 FIRST PUC · Karnataka State Board

Practice Chapter 1: Business Trade and Commerce with a free chapter-wise online MCQ test for Karnataka State Board CLASS 11 FIRST PUC BUSINESS STUDIES. This chapter covers: This chapter covers the history of trade and commerce in India concepts objectives classification of business activities industry commerce and business risk factors.. AI-generated questions from basic to board-exam level, with instant results and explanations.

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Chapter 1: Business Trade and Commerce — Important Questions & Answers (FAQ)

Frequently asked questions from Karnataka State Board CLASS 11 FIRST PUC BUSINESS STUDIES — Chapter 1: Business Trade and Commerce, with answers and explanations. These are sample questions; the exam has its own separate question set.

What is the main purpose of business activity?

A. To satisfy human wants through production and exchange of goods and services ✓
B. To provide free goods to everyone
C. To avoid use of money in transactions
D. To eliminate all risks from economic life

Answer: A. To satisfy human wants through production and exchange of goods and services
Business is undertaken to produce and distribute goods and services to satisfy human wants. Profit is an important objective, but satisfying customers is the core purpose.

Which of the following is an example of commerce?

A. Cultivation of wheat
B. Transportation of goods from one place to another ✓
C. Making furniture in a workshop
D. Mining coal from the earth

Answer: B. Transportation of goods from one place to another
Commerce includes activities that help in the distribution of goods, such as transport, storage, banking, and insurance. Transportation is a part of commerce.

A business person buys goods in bulk from one state and sells them in another state. This activity is mainly called:

A. Industry
B. Trade ✓
C. Construction
D. Manufacturing

Answer: B. Trade
Trade means buying and selling of goods for profit. Since the person is purchasing and reselling goods, it is a trade activity.

Which statement correctly distinguishes trade from commerce?

A. Trade includes transport and banking, while commerce includes only buying and selling
B. Commerce includes trade and auxiliaries to trade, while trade is only buying and selling ✓
C. Trade and commerce mean exactly the same thing
D. Commerce is only concerned with production

Answer: B. Commerce includes trade and auxiliaries to trade, while trade is only buying and selling
Trade refers to buying and selling of goods, while commerce is a wider concept that includes trade and the services that support it. Hence commerce is broader than trade.

Which of the following is the best example of a business risk caused by natural factors?

A. Loss due to fire in a godown
B. Loss due to change in consumer taste
C. Loss due to flood destroying stock ✓
D. Loss due to strike by workers

Answer: C. Loss due to flood destroying stock
Natural factors such as floods, earthquakes, and cyclones can damage business assets and stock. Flood destroying stock is therefore a natural business risk.

Next Chapter →

Chapter 2: Forms of Business Organisation