Business Studies (215) - Oct' 2015 | NIOS SECONDARY Solved Papers

Ans.:- (D) Lack of self confidence

11. Explain the following in reference to E-commerce:  3

(a) B2B (b) B2C

Ans.:- (a) B2B (Business-to-Business):- Companies doing business with each other such as manufacturers selling to distributors and wholesalers selling to retailers. Pricing is based on quantity of order and is often negotiable.

(b) B2C (Business-to-Consumer):- Business selling to the general public typically through catalogs utilizing shopping cart software. By dollar volume, B2B takes the price, and the consumer to do the transactions.

12. Explain the term ‘profession’ giving any tow examples.        3

Ans.:- Profession:- A person may not be an expert in every field. So, we require services of others who specialize in one field or other. For example, we need the services of doctors for our treatment, lawyers to get legal support etc. they are all engaged in profession. Thus profession refers to an occupation, which requires specialized knowledge and training to pursue it and primary objective of every profession is to provide service.

13. State the effect of non-registration of a partnership firm.    3

Ans.:- The effect of non-registration of a partnership firm are:-

a)      Your firm cannot take any action in a court of law against any other party for settlement of claims.

b)      In case there is any dispute among partners, it is not possible to settle the settlement of claims, through a court of law.

c)       Your firm cannot claim adjustments for amount payable ot or receivable from any other party through a court of law.

14. Farmers of nearby villages growing vegetables want to pool their products and carry them to a nearby big city vegetable market. Which mode of transport will be more suitable? Explain by giving three advantages of this mode of transport.            3

Ans.:- Road Transport will be more suitable for the Farmers of nearby villages. The following are the advantages of Road transport:-

(i)      It is relatively cheaper mode of transport as compared to other modes.

(ii)    Perishable goods can be transported at a faster speed by road carriers over a short distance.

(iii)   It is a flexible mode of transport as loading and unloading is possible at any destination. It provides door-to-door service.

15. Explain the following tools of sales promotion:         3

(a) Free samples (b) Price off offer

Ans.:- Tools of sales promotion:

(a)    Free samples:- We might have received free samples of shampoo, washing powder, coffee powder, etc. while purchasing various items from the market. Sometimes these free samples are also distributed by the shopkeeper even without purchasing any item from his shop. These are distributed to attract consumers to try out a new product and thereby create new customers.

(b)   Price-off offer:- Under this offer, products are sold at a price lower thatn the original price. For example Rs.2 off on purchase of a lifebuoy soap, Rs. 15 off on a pack of 250 grams of Taj Mhal tea etc.

16. Explain the following characteristics of Joint Stock Company:             4

(a) Artificial person (b) Separate Legal Entity

Ans.:- Characteristics of a Joint Stock Company:

(i)     Artificial legal Person:-  A company is an artificial person created by law and existing only in contemplation of law. A human being who takes birth, grows, enters into relationships and dies, whereas a joint stock company also takes birth, grows, enters into relationship and dies. However, it is called an artificial person as its birth, existence and death are regulated by law.

(ii)   Separate Legal Entity:- A company has a separate legal entity distinct from its members. It can own property and enter into contracts in its own name. It can sue and be sued in its own name.

17. Explain granting of (a) Loans and (b) Advances by Commercial Banks.             4

Ans.:- Granting of (a) Loans and (b) Advances by commercial Banks

(a)    Loans:- A loan is granted for a specific time period. Generally commercial banks provide short-term loans. But term loans, i.e. loans for more than a year may also be granted. The borrower may be given the entire amount in lump sum or in instalments. Loans are generally granted against the security of certain assets.

(b)   Advances:- An advance is a credit facility provided by the bank to its customers. It differs from loan in the sense that loans may be granted for longer period, but advances are normally granted for a short period of time. Further the purpose of granting advances is to meet the day-to-day requirements of business.

18. Explain the following mail services provided by Post offices:                              4

(a) Speed Post (b) Registered Post

Ans.:- (a) Speed Post:- Speed post service was introduced on 1^st August 1986. Sometimes because of some urgency or to avoid delay we want that our mail should reach the addressee at the earliest. Here post office provides time-bound as well as guaranteed mail delivery through its Speed Post Services. Under this service, letters, documents and parcels are delivered faster i.e., within a fixed time frame.

(b) Registered Post:- Sometimes we want to ensure that our mail is definitely delivered to the addressee otherwise it should come back to us. In such situations, the post office offers registered post facility through which we can send our letters and parcels. These mails are handed over to the post office after affixing additional postage as registration charge.

19. A buyer seek compensation from the manufacturer if the product supplied to him/her is defective provided he/she takes care of few things after buying. What are they?   4

20. Explain ‘wage employment and ‘self employment as career avenues.            4

Ans.:- Wage employment:- Wage employment means serving another person for wages or salary. If someone is appointed as office assistant, he is expected to do what the office supervisor wants him to do, and he gets a monthly salary for his job. This type of employment is based on a contract between the employers and employee.

Self employment:- If an individual engages in any economic activity and manages it on his own, it is known as self-employment. In every locality, you may come across small stores, repair shops or service units. These establishments are owned and managed by a single person, sometimes they engage one or two assistants for help.

21. What is meant by ‘social objectives of business’? Explain any two social objectives of business.       5

Ans.:- Social objectives are those objectives of business, which are desired to be achieved for the benefit of the society. No activity of the business should be aimed at giving any kind of trouble to the society.

(i)     Production and supply of quality goods and services:- Since the business utilizes the various resources of the society, the society expects to get quality goods and services from the business. The objective of business should be to produce better quality goods and supply them at the right time and at a right price.

(ii)   Adoption of fair trade practices:- The business unit must not create artificial scarcity of essential goods or raise prices for the sake of earning more profits. All these activities earn a bad name and sometimes make the businessmen liable for penalty and even imprisonment under the law. Therefore, the objective of business should be to adopt fair trade practices for the welfare of the consumers as well as the society.

22. What is meant by Multinational Company? State any four advantages of Multinational Company.   5

Ans.:- Multinational Company:- It is a company which carries on business not only in the country of its incorporation but also in one or more other countries. Such a company may produce goods or arrange services in one or more countries and sell these in the same or other countries.

Advantages of Multinational companies

(i)     Investment of Foreign Capital:- Direct investment of capital by Multinational Companies helps under-developed counties to speed up their economic development.

(ii)   Generation of Employment:- Expansion of industrial and trading activities by Multinational Companies leads to creation of employment opportunities and raising the standard of living in host countries.

(iii) Increase in Exports and Inflow of Foreign Exchange:- Goods produced in the host countries are sometimes exported by Multinational Companies. Foreign exchange thus earned contributes to the foreign exchange reserves of host countries.

(iv)  Healthy Competition:- Efficient production of quality goods by Multinational Companies prompt the domestic producers to improve their performance in order to survive in the market.

 23. State in brief any five functions of a wholesaler.      5

Ans.:- Following are the functions, which a wholesaler usually performs.

(a)    Collection of goods:-  A wholesaler collects goods from manufacturers or producers in large quantity.

(b)   Storage of goods:-  A wholesaler collects the goods and stores them safely in warehouses, till they are sold out. Perishable goods like fruits, vegetables, etc. are stored in cold storage.

(c)    Distribution: A wholesaler sells goods to different retailers. In this way, he also performs the function of distribution.

(d)   Financing:- The wholesaler provides financial support to producers and manufacturers by providing money in advance to them. He also sells goods to the retailer on credit. Thus, at both ends the wholesaler acts as a financier.

(e)   Risk taking:- The wholesaler buys finished goods from the producer and keeps them in the warehouses till they are sold. Therefore, he assumes the risks arising out of changes in demand, rise in price spoilage or destruction of goods.

24. Give the meaning of departmental store. Explain any four of its advantages. 5

Ans.:- A Departmental Store is a large-scale retail shop where a large variety of goods are sold in a single building. The entire building is divided into a number of departments or counters. In each department specific type of goods like stationery items, books, electronic goods, garments, jewellery etc. are available.

The following are the advantages of Departmental Store:-

(1)    Convenience of shopping:- Since a large variety of goods are sold under one roof, we need not move from one bazaar to another or from one shop to another to buy goods.

(2)    Wide choice of products:- A wide variety of products from different manufactures are sold in these stores. Thus, a customer has a wide choice of goods from which he/she can select the best product as needed.

(3)    Economies of large-scale purchase and sale:- Departmental stores buys goods on large scale. So it can bypass wholesalers and gets the goods directly from the manufacturers. This way it enjoys the benefits of discounts from the manufacturers.

(4)    Mutual advertisement:- While visiting departmental store customers are often attracted by goods displayed in different departments. Hence, there is a chance that the customers may buy goods other than those they originally had in mind. Thus, each department advertises for other departments.

25. State in brief the need for consumer protection giving any five points.          5

Ans.:- The necessity of adopting measures to protect the interest of consumers arises mainly due to their helpless position and the unfair business practices. No doubt consumers have the basic right to be protected from the loss or injury caused on account of defective goods and deficiency of services.

(a)    Consumers are unable to make use of their rights due to lack of awareness and ignorance.

(b)   Under certain circumstances, we are helpless in the sense of our inability to verify the quality of products. The clever shopkeeper can deceive us by his persuasive words.

(c)    We are guided by some of our beliefs without any basis. For instance, many of us believe that ‘higher price indicates better quality’ and so do not mind paying higher price for a product if the salesmen recommends it to be of good quality.

(d)   Processed food sold in packets, like potato chips, are not good for health, but young boys and girls buy these because they are tasty. Certain brands of soft drink are popular with young people as the brand ambassadors shown on the TV are popular film artists or cricketers and what they say carries lot of weight with their fans.

(e)   Producers of goods often put standard certification marks like ISI on the package which are genuinely certified. Similarly, if packaged goods are sold short of weight we pay for, it is very difficult to verify always the weights before buying.

26. Explain the need for warehousing stating any four reasons.                6

Ans.:- Warehousing is necessary because of the following reasons.

(i)     Seasonal Production:- We know that agricultural commodities are harvested during certain seasons, but their consumption or use takes place throughout the year. Therefore, there is a need for proper storage or warehousing for these commodities, from where they can be supplied as and when required.

(ii)   Seasonal Demand:- There are certain goods which are demanded seasonally, like woollen garments in winters or umbrellas in the rainy season. However, the production of these goods takes place throughout the year to meet the seasonal demand. So there is a need to store these goods in a warehouse to make them available at the time of need.  

(iii) Large-scale Production:-  In case of manufactured goods, now-a-days production takes place to meet the existing as well as future demand of the products. Manufacturers also produce goods in huge quantity to enjoy the benefits of large-scale production, which is more economical.

(iv)  Quick Supply:- Both industrial as well as agricultural goods are produced at some specific places but are consumed throughout the country. Therefore, it is essential to stock these goods near the place of consumption so that without making any delay these goods are made available to the consumers at the time of their need.

27. Explain the following principles of insurance:            6

(a) Utmost good faith

(b) Indemnity

(c) Subrogation

Ans.:- (a) Utmost good faith:- The insurer must honour all the promises made in the policy, intentional withholding of information invalidates the contract. For example, while entering into a contract of life insurance, the insured must declare to the ^insurance company if he is suffering from any disease that may be life threatening. If he fails to do so and afterwards it is established that the insured was suffering from a desease which was the cause of his death, then the insurance company shall not be liable to pay any claim.

(b) Indemnity:- The word indemnity means to restore someone to the same position that he/she was in before the event concerned took place. This principle is applicable to the fire and marine insurance. It is not applicable to life insurance, because the loss of life cannot be restored.

(c) Subrogation:-  In the contract of insurance subrogation means that after the insurer has compensated the insured, the insurer gets all the rights of the insured with regard to the subject matter of the insurance. For example, suppose goods worth Rs. 20,000/- are partially destroyed by fire and the insurance company pays the compensation to the insured, then the insurance company can take even these partially destroyed goods and sell them in the market.

28. Vikram, who is running a marketing business, wants to employ number of sales persons. Explain any four qualities that a sales person should possess.        6

Ans.:- A sales person should possess the following qualities:-

i.        Physical qualities:- A salesperson should  have a good appearance and an impressive personality. He should also have sound health.

ii.      Mental qualities:- A good salesperson should posses certain mental qualities like imagination, initiative, self-confidence, sharp memory, alertness etc. he should be able to understand the needs and preferences of customers.

iii.    Integrity of character:- A good  salesperson should posses the qualities of honesty and integrity. He is to gain the confidence of the customers. He should be able to understand their needs and guide them how to satisfy those needs.

iv.     Knowledge of the product and the company:- A salesperson should have full knowledge of the product and the company he is representing. He should be able to explain each and every aspect of the product i.e. its qualities, how to use it, what precautions to be taken etc.

29. Explain in brief the following rights of consumers:   6

(a) Right to safety

(b) Right to choose

(c) Right to be informed.

Ans.:- Rights of consumers:-

(a)    Right to safety:- Consumers have a right to be protected against marketing of goods which are injurious to health and like. As a consumer if you are conscious of this right, you can take precautions to prevent the injury or if injury is caused in spite of precaution, you have a right to complain against the dealer and even claim compensation.

(b)   Right to choose:- Every consumer has the right to choose the goods needed from a wide variety of similar goods. Very often dealers and traders try to use pressure tactics to sell goods of inferior quality.

(c)    Right to be informed:- Consumers also have the right to be informed about the quantity, quality, purity, standard or grade and price of the goods available so that they can make proper choice before buying any product or service.

30. Veena who had been working as a Human Resource Manager in a company decides to start her own business. What qualities she should possess to be a successful entrepreneur? Explain any four such qualities.                 6

Ans.:- Veena should possess the following qualities to be a successful entrepreneur:-

(1)    Initiative:- In the world of business, opportunities come and go. An entrepreneur has to be a man of action. He should be able to initiate action and take advantage of the opportunity.

(2)     Willingness to assume risk:- In any business there is an element of risk. It implies that a businessman may be successful or unsuccessful. In other words, it is not necessary that every business shall earn profit. However, an entrepreneur always volunteers to take risks to run a business and be successful.

(3)    Ability to learn from the experience:- An entrepreneur may commit mistakes. However, once a mistake has been committed, it should not be repeated as that entrepreneur, therefore, should have the ability to learn from the experience.

(4)    Motivation:- Motivation is  the key to success. This is necessary for success in every walk of life. Once you get motivated to do something you will not rest unless you complete it.  For example, sometimes you become so much interested in reading a story or a novel that you do not sleep unless you complete it.

(5)    Self-confidence:- For achieving success in life, one should have confidence in himself or herself. A person who lacks confidence can neither do any work himself nor can inspire others to work. A successful entrepreneur must have self-confidence.

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