Chapter 2

Question 1

What are the important components of business?

Answer 1

There are two important components of business: Industry and Commerce.

Question 2

Define industry.

Answer 2

Industry is that part of business which is connected with the production of goods and services.

Question 3

Define primary industry.

Answer 3

Primary industry is engaged in the production or extraction of raw materials, which are used in secondary industry.

Question 4

Explain the types of primary industry.

Answer 4

There are two types of primary industry: Extractive Industry and Genetics Industry.

Question 5

What is Extractive Industry?

Answer 5

In this industry, hidden resources below the surface of the earth are extracted. All kinds of minerals are examples of such industry.

e.g. extraction of oil, gas and coal.

Question 6

What is Genetics Industry?

Answer 6

Genetics industry is engaged in the reproduction or multiplication of certain species of plants and animals.

e.g., Plant nurseries, poultry farms and cattle breeding.

Question 7

Define secondary industry.

Answer 7

These industries use raw materials and make useful goods of another form. Raw material of these industries is obtained from primary industry.

Question 8

Explain the types of secondary industry.

Answer 8

There are two types of secondary industry: Constructive Industry and Manufacturing Industry.

Question 9

What is Constructive Industry?

Answer 9

This industry is engaged in the construction of buildings, bridges, roads, dams, etc.

Question 10

What is Manufacturing Industry?

Answer 10

This industry is concerned with the processing or transformation of raw materials and semi-finished products.

Question 11

What is meant by commerce?

Answer 11

The term ‘commerce’ includes all activities, functions, and institutions involved in transferring goods from their place of production to the consumers.

e.g., Transportation of goods, traders, agents, insurance companies, financial institutions, publicity, and warehousing etc.

Question 12

Which hindrances can be removed with the help of commerce?

Answer 12

The hindrances that can be removed with the help of commerce include:
(i) Human obstacle
(ii) Obstacle of time
(iii) Obstacle of place
(iv) Financial obstacle
(v) Obstacle of danger

Question 13

What are the trade auxiliaries?

Answer 13

Trade auxiliaries include:
(i) Banking & finance
(ii) Transportation
(iii) Communications
(iv) Insurance
(v) Warehousing
(vi) Publicity
(vii) Middlemen
(viii) Packaging

Question 14

Define home/domestic/local/internal trade.

Answer 14

Home trade is the exchange of goods or business conducted within the boundaries of a particular country, where both seller and buyer are related to the same country.

Question 15

Explain the kinds of home trade.

Answer 15

There are two types of home trade:
(a) Wholesale Trade: Buying and selling of goods in large quantities. Wholesalers buy goods from producers to sell in small quantities to retailers.
(b) Retail Trade: Selling goods in small quantities to ultimate consumers. Retailers purchase goods from manufacturers or wholesalers.

Question 16

Define foreign trade.

Answer 16

Foreign trade is the trade or exchange of goods and services between two or more independent countries.

Question 17

Explain the types of foreign trade.

Answer 17

Foreign trade has three types:
(a) Import Trade: Buying goods and services from other countries.
(b) Export Trade: Selling goods and services to other countries.
(c) Entrepot Trade: Importing goods from various countries to re-export them.

Question 18

What is meant by trade?

Answer 18

Trade is defined as the exchange of commodities and includes all selling and buying activities to earn profit either within a country or across boundaries.

Question 19

How does commerce help in developing the style of living of the people?

Answer 19

Commerce improves the availability of cheap and high-quality consumer goods, enhances the standard of living, promotes savings, and increases the income of people.

Question 20

How does commerce make the available resources useful?

Answer 20

Commerce facilitates the export and import of goods, allowing countries to specialize in the production of particular goods and import others, optimizing the use of their resources.

Question 21

What are the points of communication’s importance in Pakistan?

Answer 21

The importance of communication in Pakistan includes:
(1) Increase in investment
(2) More Employment
(3) Expansion of business
(4) Better living standards

Question 22

What are the main types of industry?

Answer 22

The main types of industry are:
(i) Primary Industry (Extractive Industry & Genetics Industry)
(ii) Secondary Industry (Manufacturing Industry & Constructive Industry)