Ch#1 Business, Trade And Commerce

Question 1

What is meant by business risk?

Answer 1

The possibility of inadequate profits or losses due to uncertainties or unexpected events.

Question 2

What are the two types of risks?

Answer 2

Speculative risk and pure risk

Question 3

What is meant by speculative risk?

Answer 3

Speculative risk involves both the possibility of gain as well as possibility of loss. It arises due to change in market conditions, fluctuations in demand and supply, changes in price and tastes of customers

Question 4

What is meant by pure risk?

Answer 4

Pure risk involve only possibility of loss or no loss. The chance of fire, theft or strike are examples of pure risk. Their occurrence may result in loss whereas non occurrence may result in no loss instead of gain

Question 5

What are the causes of business risks?

Answer 5

Natural causes
Human causes
Economic causes
Other causes

Question 6

What are the two broad classifications of trade?

Answer 6

Internal trade and external trade

Question 7

What are the few major trade centres?

Answer 7

Taxila
Mathura
Varanasi
Mithila
Surat
Madura

Question 8

Define business

Answer 8

Business is considered to be an economic activity because it is undertaken with the objective of earning money