Unit 4: Entrepreneurial Skills (Types of Business Activities)
Assessment Time
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
Answer: a) Entrepreneur
2. What kind of business ownership is best described by these statements?
• I am 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
Answer: a) Sole Proprietorship
3. An entrepreneur _____________.
a) enforces government regulations
b) takes risk to earn profits
c) sets the interest rates at banks
d) manages financial investments
Answer: b) takes 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
Answer: 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
Answer: 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 which do not have a physical form is called 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 & sell or trading business.
C. Answer the Following Questions:
1. How will you define an entrepreneur?
Answer: An entrepreneur is a person who takes the initiative of starting a business, bears the risk of investing money, manages at all levels, and is responsible for its success or failure.
2. What do you understand by the term ‘business’?
Answer: Business is an area of work or an activity related to production, buying and selling of goods and services.
3. What are the four forms of business organisations based on ownership?
Answer: The four forms of business organisations based on ownership are - Sole proprietorship, Partnership, Cooperative, and Corporation.
4. In a business, what is the meaning of the term ‘liability’?
Answer: All forms of business ownership have liabilities. Being legally responsible for a business is termed as ‘liability’.
D. Answer in One or Two Sentences:
Identify the type of business ownership based on the following descriptions:
1. It is a separate entity from its owners and may employ its owners. Owners have limited liability and pay separate tax for the business.
Answer: 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.
Answer: Partnership
E. Answer the Following Questions:
1. What are the benefits of learning entrepreneurial skills?
Answer: The benefits of learning entrepreneurial skills are
• 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, sales, marketing, management, and accounting.
• It helps in the development of other skills such as adaptability, effective communication, business discipline and confidence.
2. Why is liability an important factor in any business?
Answer: Ownership means ‘possessing something’. When you own a business, it is big responsibility of how you organise and manage it. You are responsible for your business in every way. Being legally responsible for a business is termed as ‘liability’.
3. Explain the differences between sole proprietorship and partnership.
Answer: Sole proprietorship is a business owned by a single person. It is easy to set up and is the least costly among all forms of ownership. Sole proprietorship is usually adopted for small independent business. The owner keeps all the profits. It is considered to be to most appropriate during early stages of a business. Partnership is a business owned by two or more persons who jointly invest money in the business. The partners share the profits and losses together. It yields higher growth rates than sole proprietorship.
4. What are some advantages of running a corporation form of business organisation?
Answer: Corporations attract investors because shareholders of a corporation have limited liabilities. Shares of the ownership are transferable, so the corporation continues to exist even if the management changes.
F. Application Based Questions:
1. A group of 15 retired people in your neighbourhood wants to start an organisation to educate underprivileged children. Suggest them the type of organisation that they can start.
Answer: Cooperative
2. Surabhi wants to start her own boutique. She wants to an option that requires minimum investment and business regulations. Which business ownership option should she choose and why?
Answer: Sole proprietorship
No comments:
Post a Comment