CASE STUDIES - NATURE AND PURPOSE OF BUSINESS

1) Classify the following activities into economic activities and non economic activities. Also give reason
in support to your answers.
a) Smita cooking food for her family.
b) A person selling cold drinks on the station.
c) A man praying for his interview.
d) Doctor treating patients at his clinic.
e) An old lading attending prayer sessions.
f) Teacher teaching his daughter for the board exams.

2) 3 friends Amar Akbar and Anthony completed their studies and plan to join their father's business.
Amar got engaged in his sugarcane farm. Akbar joined his father's sugar mill. Antony join the transport
business of his father. Identify the different types of industries being discussed in the given case.

3) After completing the graduation, three close friends Govind Satish and Vinod decided to start trading
of goods and services.

a) Govind started purchasing mobile accessories from China to be sold in India.

b) Satish established history business and started purchasing tea from Assam and selling it to
America.
c) Vinod deals in purchase of chocolates from Switzerland and sell them to Bangladesh and Nepal.

Identify the types of external trade highlighted in the given case.

4. Mohan sells his Playstation to his friend at a profit of ₹ 2,000. Will it be considered as a business and
state the feature of business which is being highlighted in the given case.

5. Mukul is a teacher in RD public School. During the weekends, he teaches kids of slum area free of
cost. He also opened a book shop in partnership with his neighbour, Kapil. Identify the human activities
done by Mukul.

6. Ramesh was a successful businessman and owned a departmental Store. So, in order to earn more
profits, he opened two more departmental stores and employed a team of young staff to look after the
stores. Initially, the staff was very sincere and Ramesh earned huge profits from his 3 departmental
stores. However, over the last two years, his business is running into losses. on close analysis, he found
that his staff was not giving much attention to the customers. Moreover there were many cases of
embezzlement by the the employees. Identify and examine the main cause behind the losses in
Ramesh's business.

7. Tushar runs a well known fashion store dealing in women wear in Mumbai. He procures garments
from different fashion designers and sell them to dealers all over the country. He also owns a godown to
hold the surplus stock. Due to sudden increase in demand and to maintain stock for peak period korma
Tushar took a loan of ₹ 10 lacs from Kotak Bank. He has also taken an insurance policy worth ₹ 2 crores
for his business.

Identify the auxillary is to trade being used by Tushar in his business by quoting lines from the given
case.

8. "An activity can be an economic activity e in one situation and non economic activity in another
situation." Do you agree? Give an example to justify the given statement.

9. Which hindrance of commerce is highlighted in the following activities?

a) It removes the geographical separation between producers and consumers.

b) Warehousing facilitates holding of goods till they are required.
c) Advertising in forms the consumers about goods and services available in the market.
d) Trade provides an organised market when buyers and sellers can contact each other.
e) Banking and financing institutions provide necessary funds to carry on business activities.
f) There exist time gap between production and consumption of goods.
g) Insurance protects the goods in case of damage due to theft, fire, accidents, etc.

10. The following cases highlight the various situations in which entrepreneurs suffered huge losses.
Identify the cause of business risk indicated in the given cases:

a) Alok's factory was completely destroyed due to flood.

b) Tarang was a leading manufacturer of basic keypad mobiles. However demand for such mobiles
drastically decreased after the origin of smartphones.
c) Craft Ltd. is known for its technically advanced gadgets. The company is planning to launch a
latest model of speakers, which is not yet released in India. However, before the the company
could bring out its model coma the same type of speaker was launched by one of its
competitors. on scrutiny, it was discovered that one of the employees shared the technical
aspects of the speaker with the competitor.
11. Identify the type of industry highlighted in each of the following individual cases;

a) Raman is engage in the industry of obtaining coal from a mine.

b) Shivam imports different components from China and assemble them to make computers.
c) Krishna has a cement factory.
d) Akhil is engaged in the construction of flyovers.
e) Namit joint his father's business of poultry farming.

12. "Business involves a series of dealings rather than a single transaction." Which characteristic of
business is highlighted here?

13. XYZ Ltd. company has captured 52% of the market share. Which type of objective is highlighted in
the case?

14. In a market, one trader lower the price of his articles to increase the sale or the other is also bound
to do the same due to competition. Identify the cause of risk being portrayed in the case.

15. Innox limited due to some satisfaction, labourers stop the work and announced strike. Identify the
cause of risk being portrayed in the above case.

16. "Risk is an essential element of a business." Do you agree? If yes, elaborate the statement with
proper reason.

17. Rahul is working as a sales executive in Neeraj limited company. He is getting ₹ 40000 per month. His
job is to enhance the sale of the company. Identity which type of economic activity is highlighted in the
case and state some of its characteristics.

18. Sania is a well known cardiologist in the town. Identify the type of economic activity highlighted in
the given case and state its characteristics also.
19. Arihant, an owner of a huge departmental Store, charges exorbitantly due to no competition around
and he misses out no opportunity to earn profits. He finds nothing wrong as the main goal of business is
to earn profit.

a) Is his action justified question mark answer by stating the objectives of business.
b) Discuss any four values which you find are lacking in him as a rational businessman.

20. Meetu wants to start a business of manufacturing garments from handmade cotton. What possible
risk she can face in carrying out this business and if her business is successful, what values will be added
to the society?