Samacheer Kalvi 11th Commerce Solutions Chapter 3 Classification of Business Activities

Students can Download Commerce Chapter 3 Classification of Business Activities Questions and Answers, Notes Pdf, Samacheer Kalvi 11th Commerce Book Solutions Guide Pdf helps you to revise the complete Tamilnadu State Board New Syllabus and score more marks in your examinations.

Samacheer Kalvi 11th Commerce Solutions Chapter 3 Classification of Business Activities

Samacheer Kalvi 11th Commerce Classification of Business Activities Textbook Exercise Questions and Answers

I. Choose the Correct Answer

Question 1.
The industries engaged in extraction of iron ore are known as
(a) Construction industries
(b) Manufacturing Industries
(c) Extraction industries
(d) Genetic Industries
Answer:
(c) Extraction industries

Question 2.
Auxiliaries to trade is also called as
(a) Trade
(b) Advertisement
(c) Warehousing
(d) Aids to trade
Answer:
(d) Aids to trade

Question 3.
Production which involves several stages for manufacturing finished products is known as
(a) Analytical industry
(b) Synthetic Industry
(c) Processing industry
(d) None of the above
Answer:
(c) Processing industry

Question 4.
Normally high level risk is involved in
(a) Industry
(b) Commerce
(c) Trade
(d) All the above
Answer:
(a) Industry

Question 5.
Commerce is mainly concerned with
(a) Connecting producer and consumer
(b) Pricing of goods
(c) Buying and selling of goods
(d) Manufacturing of goods
Answer:
(a) Connecting producer and consumer

II. Very Short Answer Questions

Question 1.
Define Commerce.
Answer:
Commerce is the part and parcel of human life.It is emerged as an economic activity, mainly as a barter system which means the exchange of goods for goods. It is defined as an “Organized system for the exchange of goods and services between members of the industrial world”.

Question 2.
What do you mean by industry?
Answer:
The industry refers to economic activities, which are connected with the conversion of resources into useful goods. The production side of business activity is referred to as an industry.

Question 3.
What is trade?
Answer:
Trade denotes the activity of buying and selling or exchanging goods or services between people, firms or countries. A system or network that allows trade is called a market.

Question 4.
Write a short note on transportation.
Answer:
The medium which moves men and materials from one place to another is called transport. Selling all the goods produced at or near the production places is not possible. Hence, goods are to be sent to different places where they are demanded.

III. Short Answer Questions

Question 1.
Distinguish between Extractive industries and genetic industries.
Answer:
Extractive industries are concerned with drawing out products from natural sources such as soil, sea, and air. The products of such industries are generally used for producing finished goods.

Following are some of the examples of extractive industries

• Farming
• Mining
• Fishing

Genetic industries are concerned with activities like reproduction, breeding, and multiplication of animals and plants.
Following are the examples of genetic industries:

• Agricultural activities for the production of crops
• Animal husbandry
• Dairy farming
• Poultry farming

Question 2.
What do you mean by tertiary industries?
Answer:
They do not produce goods. These industries produce utility services and sell them at a profit. They help trade, industry, and commerce. This term also includes auxiliaries to trade like banking, insurance, warehouse, advertisement etc.

Question 3.
Write any three characteristics of commerce.
Answer:
The main features of Commerce:

1. Economic Activity: Commerce is treated as an economic activity since it consists of activities which are undertaken for earning profits. A trader buys goods with the aim of selling them at a profit.
2. Exchange of Goods and Services: The exchange and distribution of goods and services are done through commerce. Goods may be purchased or produced for sale. Commerce comprises both trade and aids to trade.
3. Profit Motive: Commercial activities always aims at a profit. Any activity which does not have the aim of profit will not be a part of commerce. For example, if a trader offers some goods as a gift to his friend it is not commerce.

Question 4.
Narrate commerce with an example.
Answer:
Commerce refers to all those activities which are necessary for bringing goods from the place of production to the place of their consumption. Commerce includes not only trade but also services such as transport, warehousing, packaging, insurance, banking and sales promotion which are incidental or auxiliaries to trade.

IV. Long Answer Questions

Question 1.
Explain the various kinds of industries on the basis of size.
Answer:
Meaning: The industry refers to economic activities, which are connected with the conversion of resources into useful goods. It also used to mean a group of firms producing similar or related goods. Under the Micro, Small and Medium Enterprises (MSME) Development Act, 2006, the types of industries can be classified into four.

On the basis of size or scale of operations industries may be classified as follows:

• Micro units: A unit wherein investment in plant and machinery is upto Rs.25 lakhs in case of manufacturing and upto 10 lakhs in case of service enterprises.
• Small units: A manufacturing unit wherein investment in plant and machinery is more than 25 lakhs but does not exceed Rs.5 acre. In the case of service enterprises, these hunts are Rs.10 lakhs and Rs.2 crore respectively.
• Medium units: A manufacturing unit wherein investment in plant and machinery is more than 5 crores but does not exceed Rs. 10 crores In the case of service enterprises, these limits are Rs.2 crore and Rs.5 crore respectively.
• Large units: A manufacturing unit wherein investment in plant and machinery exceeds Rs.10 crore. In the case of a service unit investment in equipment exceeds Rs.5 crore.

Question 2.
Compare industry, commerce, and trade.
Answer:

Question 3.
What are the characteristics of Commerce?
Answer:
Definition of Commerce:
According to Evelyn Thomas, “Commercial operations deal with the buying and selling of goods, the exchange of commodities and the contribution of finished products”. Commerce includes not only trade but also services which are incidental or auxiliaries to trade.

The main features of Commerce:

•  Economic Activity: Commerce is treated as an economic activity since it consists of activities which are undertaken for earning profits. A trader buys goods with the aim of selling them at a profit.
• Exchange of Goods and Services: The exchange and distribution of goods and services are done through commerce. Goods may be purchased or produced for sale. Commerce comprises both trade and aids to trade.
• Profit Motive: Commercial activities always aims at a profit. Any activity which does not have the aim of profit will not be a part of commerce. For example, if a trader offers some goods as a gift to his friend it is not commerce.
• The regularity of Transaction: The transactions should be done continuously to make it commerce. An isolated transaction does not imply commerce. For example, if a person sells his typewriter it is not commerce.
• Creation of Utilities: Commerce creates several types of utilities. It creates place utility by carrying goods to the place where they are needed. It makes goods available as and when demanded thereby creating time utility. By creating these utilities commerce helps to increase the volume of trade. demanded. The medium which moves men and materials from one place to another is called transport.
• Part of business: Commerce is a branch of economics. Economics is the study of human beings as consumers and producers.

Question 4.
Write short notes on:

1. Analytical industry
2. Genetic industry and
3. Construction industry.

Answer:
1. Analytical Industry: It analyses and separates different elements from the same materials, as in the case of oil refinery.

2. Genetic Industries: These industries remain engaged in breeding plants and animals for their use in further reproduction. The seeds, nursery companies, poultry, diary, piggeiy, hatcheries, nursery, fisheries, apiary etc are classic examples of genetic industries.

3. Construction Industries: These industries are involved in the construction of buildings, dams, bridges, roads, as well as tunnels, and canals.

Question 5.
Briefly explain the auxiliaries of trade.
Answer:
All activities that facilitate the smooth flow of goods from manufacturing centers to the consumption centers are called auxiliaries to trade or aids to trade. It may be classified into five categories. They are:

1. Transportation:
It is not possible for the producers to sell all the goods produced by them near the production centre. So the goods had to be sent to different places where they are demanded. The medium which moves men and materials from one place to another is called transport.

2. Banking and Finance:
Without banks, the business cannot be run smoothly. Banks supply money. A bank is an organization which accepts deposits of money from the public, withdrawals on demand or otherwise, and lends the same to those who need it. Business activities cannot be undertaken unless funds are available for acquiring assets, purchasing raw materials, and meeting other expenses. A businessman can obtain funds from banks. Thus banking helps business activities to overcome the problem of finance.

3. Insurance:
Business involves various kinds of risks. The factory assets must be protected against fire, theft, and other risks. The stock in the warehouse and in transit is subject to the risk of loss or damage. Employees also need protection against occupational hazards. Insurance provides protection in all such cases. On payment of a nominal premium, the amount of loss or damage and compensation for injury if any can be recovered from the insurance company.

4. Warehousing:
There is a time gap between the goods production and the final consumption. The goods produced have to be maintained as stock to make them available as and when required. Special arrangements must be made for the storage of goods to prevent loss or damage. Warehousing helps business firms to overcome the problem of storage and facilitates the availability of goods when needed. The price of the product should be maintained at a reasonable level through a continuous supply of goods.

5. Advertising:
The sale of the products has been increased with the help of advertising. Fast-moving consumer goods like soaps, detergents, electronic goods, and automobiles need advertisement to reach people. It is not possible for the producer and the trader to reach each and every consumer. Thus for promoting sales information about the goods and services available their features, price, etc., must reach potential buyers.

Also, there is a need to persuade potential buyers about the uses, quality, prices, competitive information about the goods and services, etc. Advertising helps in providing information about available goods and services and inducing customers to buy particular items.

Samacheer Kalvi 11th Commerce Classification of Business Activities Additional Questions and Answers

I. Choose the Correct Answer:

Question 1.
All business activities can be classified into ……………. broad categories.
(a) Two
(b) Three
(c) Four
(d) Five
Answer:
(a) Two

Question 2.
Where is the mechanical appliances and technical skills used?
(a) Industry
(b) Commerce
(c) Business
(d) Trade
Answer:
(a) Industry

Question 3.
Horticulture is an example for …………….
(a) Primary industry
(b) Secondary industry
(c) Tertiary industry
(d) Local industry
Answer:
(a) Primary industry

Question 4.
……………. industry assembles different component parts to make a new product, as in the case of television, car, computer, etc.
(a) Assembling
(b) Processing
(c) Analytical
(d) Construction
Answer:
(a) Assembling

Question 5.
Professional or specialized skills and high technology are used to provide ……………. type of services.
(a) Personalised
(b) Public
(c) Distributive
(d) Quaternary
Answer:
(d) Quaternary

Question 6.
Banking, factoring, accounting and insurance come under ……………. type of service.
(a) Mechanical
(b) Financial
(c) Personal
(d) Quinary
Answer:
(b) Financial

Question 7.
Commerce represents ……………. side of goods and services.
(a) Demand
(b) Profit
(c) Supply
(d) Cost
Answer:
(a) Demand

Question 8.
Special arrangements must be made for goods to prevent loss or damage.
(a) Transportation
(b) Pricing
(c) Storage
(d) Advertising
Answer:
(c) Storage

II. Very Short Answer Questions

Question 1.
What is the Extractive industry?
Answer:
Extractive industries extract or draw out products from natural sources. Extractive industries supply some basic raw materials that are mostly products of the geographical or natural environment.

Question 2.
What is Primary industry?
Answer:
Primary industry is concerned with the production of goods with the help of nature. It is a nature-oriented industry, which requires very little human effort.

Question 3.
What is the Secondary industry?
Answer:
Secondary Industries are concerned with using the materials which have already been extracted at the primary stage. These industries process such materials to produce goods for final consumption or for further processing by other industrial units.

Question 4.
What is the tertiary industry?
Answer:
They do not produce goods. These industries produce utility services and sell them at a profit. They help trade, industry, and commerce. This term also includes auxiliaries to trade like banking, insurance, warehouse, advertisement, etc.

Question 5.
What are the auxiliaries to trade?
Answer:

1. Transportation
2. Banking and Finance
3. Insurance
4. Warehousing
5. Advertising

III. Short Answer Questions

Question 1.
Write any three categories of Manufacturing industries.
Answer:

1. Analytical Industry analyses and separates different elements from the same materials, as in the case of an oil refinery.
2. The synthetic Industry combines various ingredients into a new product, as in the case of cement.
3. The processing Industry involves successive stages for manufacturing finished products, as in the case of sugar and paper.