BUSINESS STUDIES (CLASS 11)CHAPTER 1 BUSINESS TRADE AND COMMERCE

CHAPTER 1 BUSINESS, TRADE AND COMMERCE

1. Economic Activities: Economic activities are any activities that are carried out with the goal of earning money and livelihood. For example, a worker working in a factory , a teacher teaching in school.

It is majorly of three types:

Business
Profession
Employment.
2. Non-Economic activities: Activities which are performed out of love, affection, sympathy,etc , and without the aim of earning profit are called non-economic activities.For Example social work, religious activities etc.
3. Business: Any economic activity that is undertaken regularly and continuously to satisfy the societal needs as well as to earn profit through the mechanism of sale and purchase of goods and services is called a business.
4. Profession: Anyeconomic activity which is carried out by a person with specialised knowledge and skills in order to serve society is called profession.
5. Employment: Any economic activity which involves doing work for someone else in consideration of money is termed as employment.
6. Industry- It is basically concerned with the production of goods and services for an economic motive. It is further divided into following categories:
Primary, Secondary, Tertiary
7. Commerce: Commerce includes all the activities which are required for the exchange of goods and services. It also involves all the activities that assists in removal of hindrances of people, place, time, finance, risk, information faced during the exchange of goods and services. It includes two types of activities:
Trade and Auxiliaries to Trade
8. Trade: The buying and selling of goods and services with an aim to earn profit is termed as trade. The people who are involved in trade are referred to as traders..
9. Business Risk: The risk caused due to inadequate profits or losses as a result of uncertainties or unexpected events is called business risk.

10. Causes of Business Risks
Natural causes: These are due to natural causes such as floods, earthquakes, etc. Every person has little control or no control over these causes.
Human causes: These causes include unexpected events caused by man, such as negligence of employees, power failure, employee’s or customer’s dishonest practices etc.
Economic causes: The economic causes involve the changes and variations taking place in the economy such as uncertainties due change of technology and method of production, political disturbances, change in prices, tax rates etc.
Other causes: All those causes which cannot be considered under the above causes are the other causes, such as exchange rate fluctuations etc.