A. Multiple Choice Questions:
1............................. is a person who takes a risk to produce goods and services in search of profit.
- a. Entrepreneur
- b. Employee
- c. Police
- d. Bureaucrat
Ans. a. Entrepreneur
2. What kind of business ownership is best described by these statements?
I am the only owner of my business.
I take all the risks of doing business.
I keep all the profits.
- a. Sole Proprietorship
- b. Corporation
- c. Partnership
- d. Cooperative
Ans. a. Sole Proprietorship
3. An entrepreneur...........................
- a. enforces government regulations
- b. takes the risk to earn profits
- c. set the interest rates at banks
- d. manages financial investments
Ans. b. takes the risk to earn profits
4. A grocery store is an example of which type of business activity?
- a. Service
- b. Merchandising
- c. Manufacturing
- d. Hybrid
Ans. b. Merchandising
5. What is the advantage of a cooperative?
- a. Income tax exemption
- b. Minimal government regulation
- c. Short life span
- d. Single ownership
Ans. a. Income tax exemption
B. Fill in the Blanks:
1. The basic objective of a cooperative is to meet the economic, social, and cultural needs of its members.
2. A hybrid business is a mixed type of business.
3. A business that provides products that do not have a physical form is called a service business.
4. Retail price is the price of goods or products when they are sold to customers for consumption, and not for resale.
5. Merchandising business is also known as buy and sell or trading business.
D. Identify the type of business ownership based on the following description:
1. It is a separate entity from its owners and may employ its owners. Owners have limited liability and pay separate taxes for the business.
Ans. Corporation
2. It is a business owned by two or more people who share the profits of the business among themselves and bear the losses together
Ans. Partnership
E. Answer the Following Questions:
1. What are the benefits of learning entrepreneurial skills?
Ans. Benefits of learning entrepreneurial skills:-
- It helps to think about new business ideas.
- It helps to cultivate skills and knowledge for starting an enterprise.
- It develops business skills in areas such as finance, marketing management, and accounting.
- It also helps in the development of effective communication, business skills, discipline, and confidence.
2. Why is liability an important factor in any business?
Ans. Ownership means 'possessing something'. When we own a business, it is a big responsibility how we organize and manage it. We are responsible for our business in every way. Therefore liability is an important factor in any business.
3. Explain the differences between sole proprietorship and partnership.
Ans. A sole proprietorship is a business owned by a single person. The owner keeps all the profits, however, he is solely liable for all the debts.
A Partnership is a business owned by two or more persons who jointly invest money in the business. The partners divide the profits among themselves and they bear the losses together.
4. What are some advantages of running a corporation form of business organization?
Ans. Advantages -A corporation is a business organization that is considered a separate entity from its owners and pays its tax separately. The owners are called 'shareholders'. They hold stock in a company and reap the benefits of the company's success in the form of an increased value of stocks. Stockholders in a corporation have limited liability (creditors can only claim the assets of the corporation and not the assets of the stockholders for the settlement of the corporation's debt or liabilities).
F. Application Based Questions:
1. A group of 15 retired people in your neighborhood wants to start an organization to educate underprivileged children Suggest to them the type of organization that they can start.
Ans. A cooperative type of organization
2. Surbhi wants to start her own boutique. She wants to choose an option that requires minimum investment and business regulations. Which business ownership option should she choose and why?
Ans. Surbhi should use sole proprietorship as these businesses are owned by a single person. It is easy to set up, least costly, and usually adopted for small independent businesses.
Post a Comment