Class 11 Business Studies Sample Paper Term 2 with Solutions Set C

Please refer to Class 11 Business Studies Sample Paper Term 2 With Solutions Set C provided below. The Sample Papers for Class 11 Business Studies have been prepared based on the latest pattern issued by CBSE. Students should practice these guess papers for class 11 Business Studies to gain more practice and get better marks in examinations. The Term 2 Sample Papers for Business Studies Standard 11 will help you to understand the type of questions which can be asked in upcoming examinations.

Term 2 Sample Paper for Class 11 Business Studies With Solutions Set C

Case Based MCQs :

Pragyan is a teenager with lot of entrepreneurial spirit. He has recently thought of an idea which can help people to detect the alcohol levels in the drinks accurately with the pocket size device. To further initiate the process he decided to register as a startup on the portal online. To do the research, he decided to use his own savings and complete the research. He could realise that his product was going to be a very bright product in the coming future therefore he decided to protect it with the help of an intellectual property right through the property right which gave him the exclusive right on that particular device that he invented. Now he wanted to purchase some machinery to get devices produced on a mass level. Since the amount was very big and he could not afford it by himself, he decided to take some money from commercial banks which were ready to provide him assistance because of his excellent idea.

Question. Which method of startup funding is highlighted in the line, “To do the research, he decided to use his own savings and complete the research.”?
(a) Angel Investment
(b) Venture Capital
(c) Bootstrapping
(d) Microfinance

Question. Which type of working capital requirement is highlighted in the line, “Now he wanted to purchase some machinery to get devices produced on a mass level.”?
(a) Fixed Capital
(b) Working capital
(c) Both of these
(d) None of these

Question. Which Start up India Action point is highlighted in the line, “To further initiate the process he decided to register as a startup on the portal online.”?
(a) Simplification & handholding
(b) Startup India Hub
(c) Easy Exit
(d) Tax Exemption

Question. Which type of funds are highlighted in the line, “he decided to take some money from commercial banks which were ready to provide him assistance because of his excellent idea.”?
(a) Owner’s Fund
(b) Borrowed Funds
(c) Both of these
(d) None of these

Question. Which IPR gave him the exclusive right on the product?
(a) Copyright
(b) Trademark
(c) Trade Secrets
(d) Patent

Short Answer Type Questions :

Question. After the pandemic, India saw an upsurge in the number of start-ups that have come up the ranks and became unicorns. This clearly shows the entrepreneurial spirit in our country is enhancing with the passing time. How will entrepreneurship development help a developing economy like India? Explain any three ways in brief.
Answer : Entrepreneurship development helps a developing economy like India in the following ways (any three)
(i) Employment Opportunities It enables entrepreneurs to create more/additional employment opportunities for youth.
(ii) Economic Independence Entrepreneurs develop and produce substituted products of imported goods and prevent the over-dependence on the other countries.
(iii) Capital Formation It encourages the establishment of new industries in economy which increase the capital formation rate in country.
(iv) Development of Backward and Tribal Areas It leads to scattering of economic activities in all areas of the country.

Question. Small scale industries are quintessential for industrialisation in Rural India and alleviating poverty thereof. Defend or refute the statement by giving two substantial arguments.
Answer : Yes, I agree with the statement that small scale industries are quintessential for industrialisation in Rural India and alleviating poverty thereof. The role of small business in rural India is explained in the following points
(i) Poverty Alleviation Village and small industries are significant as producers of consumer goods and absorbers of surplus labour, thereby addressing the problems of supply, poverty and unemployment.
(ii) Promoting SSI and Rural Industrialisation Promotion of small scale industries and rural industrialisation has been considered by the Government of India as a powerful instrument for realising the twin objectives of “accelerated industrial growth and creating additional productive employment potential in rural and backward areas.”

Question. Some companies prefer to raise the money through the issue of debentures and not through the issue of equity shares. What could be the reasons for the same?
Answer : Following are the advantages or reasons of issuing debentures instead of equity shares
(i) Debentures are fixed charge funds and do not participate in the profits of the company.
(ii) Financing through debentures does not dilute control of shareholders on management as debentures do not carry voting rights.
(iii) Financing through debentures is less costly as compared to cost of equity capital as the interest payment on debentures is tax deductible.

Question. State any three needs of finance for a business enterprise.
Answer : Business enterprises require finance for the following reasons
(i) For financing fixed capital requirements, i.e., purchase of land, building, plant and machinery, etc.
(ii) For financing working capital requirements, i.e., purchase of raw material, payment of wages/salaries, for meeting certain expenditures, etc.
(iii) For growth and expansion of business enterprise.

Question. Differentiate between equity shares and preference shares on the basis of
(i) Participation in management
(ii) Sequence of Dividend
(iii) Sequence of Refund of capital
Answer :

Question. Identify and define the type of IPRs highlighted in the following examples
(i) Telephone, radio, optical fibre, ipod and ballpoint pens.
(ii) Original literary, dramatic, musical or artistic works, sound recording, films and broadcasts.
(iii) MC Donald’s double arches, apple Computer’s, Apple sign of Android.
Answer : (i) Patent as an exclusive right is granted in respect of an invention which may be product or process that provides a new and inventive way of doing something, or offers a new and inventive technical solution to a problem.
(ii) Copyright is a legal right created by the law that grant the creator of an original work’s exclusive rights for its use and distribution.
(iii) Trademark provides recognisable sign, design or expression which identifies products or services of a particular source from those of others.

Question. Differentiate between internal and external source of business finance on the basis of
(i) Purpose
(ii) Cost
(iii) Security required
Answer :

Question. Small scale industries are quintessential for providing employment in Rural India. Defend or refute the statement by giving two substantial arguments.
Answer : I agree with the statement that small scale industries are quintessential for providing employment in Rural India. The role of small business in rural India is explained in the following points
(i) Non-farm Employment Traditionally, rural households in India were exclusively engaged in agriculture. But now, rural households have varied and multiple sources of income, and participate in a wide range of non-agricultural activities alongwith the traditional rural activities of farming and agricultural labour. This can be largely attributed to the setting up of agro-based rural small industries.
(ii) Employment for Artisans Cottage and rural industries play an important role in providing employment opportunities in the rural areas, especially to the traditional artisans and the weaker sections of society.

Long Answer Type Questions :

Question.Max enterprises is a wholesaler dealing in packed food products. It collects small orders from a number of retailers and passes on the pool of such orders to the manufacturers and makes purchases in bulk quantities and pays for the same in cash. Moreover, it stores a large quantity of stock in its warehouse to ensure supply as and when required. It also advises the manufacturers to produce different products according to the customer’s tastes and preferences. With all these operations, it has been fairly successful in its operations.
Highlight the lines which reflect the services of wholesalers to manufacturers. Also, name those services and explain them.
Answer : (i) Facilitating Large Scale Production Wholesalers collect small orders from a number of retailers and pass on the pool of such orders to the manufacturers and make purchases in bulk quantities. This enables the producers to undertake production on a large scale.
Line “It collects small orders from a number of retailers and passes on the pool of such orders to the manufacturers and makes purchases in bulk quantities….”
(ii) Financial Assistance They provide financial assistance to the manufacturers as they generally make cash payment for the goods purchased by them.
Line “….. and pays for the same in cash.”
(iii) Expert Advice The wholesalers are in direct contact with the retailers, therefore they can advice the manufacturers about various aspects related to customer’s tastes and preferences, market conditions, etc.
Line “It also advises the manufacturers to produce different products according to the customer’s tastes and preferences.”
(iv) Storage Wholesalers take delivery of

Question. Retail trade is performed by retailers. A retailer is engaged in the sale of goods and services directly to the ultimate consumers. Explain how consumers are benefitted by the consumers.
Answer : Following are the services of retailers to the consumers (any five)
(i) Regular Availability of Products The most important service of a retailer to consumers is to maintain regular availability of various products produced by different manufacturers.
(ii) New Products Information By arranging effective display of products, retailers provide important information about the arrival, special features, etc of products to the customers.
(iii) Convenience in Buying Retailers generally sell goods in small quantities, according to the requirements of their customers. This offers great convenience to the customers.
(iv) Wide Selection Retailers generally keep stock of a variety of products. This enables the consumers to make their choice.
(v) After Sales Services Retailers provide important after-sales services in the form of home delivery, supply of spare parts etc.
(vi) Provide Credit Facilities The retailers sometimes provide credit facilities to their regular buyers, leading to increased level of consumption and better standard of living.

Question. Meena stores is a line of stores with multiple stores in west side of the country. These stores have similar arrangement and deal in standardised and branded consumer products, which have rapid sales turnover. Identify the type of fixed-shop large retailers and state its features.
Answer : The fixed-shop larger retailer highlighted in the given case is Chain Stores or Multiple shops.
The features of chain stores or multiple shops are
(i) These shops are located in populous localities, so that customers can be served at a place near their residence.
(ii) The manufacturing or procurement of merchandise for all the retail units is centralised.
(iii) Each retail outlet is under the direct supervision of a Branch Manager, who is responsible for its day-to-day operations.
(iv) All branches are controlled by the head office. The head office formulates policies and gets them implemented.
(v) The prices of the goods is fixed and sales are made on cash basis. Daily sales are deposited in a local bank account and details to this regard are sent to the head office.
(vi) The head office appoints inspectors, who supervise the day-to-day operations of the store in respect of quality of customer service provided, adherence to rules and regulations, etc.

Question. BPR is an outlet in MG Road area of Gurugram. It deals with FMCG products and keeps high quantity of the stocks of the same. It also maintains good number of varieties of the same. While purchasing the goods, it pays the manufacturers in cash and assists them in the marketing of the goods. It supplies goods to Ahuja Bros which is another outlet in the outskirts of Gurugram. It makes the goods available to the final consumer.
The text highlights two types of different internal trade. Identify and explain them. Also, mention which outlet falls in which type.
Answer : The two types of trades highlighted are
(i) Wholesale Trade It refers to purchasing goods and services in large quantity from manufacturers and reselling them to retailers, who then sells them to the ultimate consumers.
Chain of Wholesale Trade
Manufacturers —- Wholesalers —- Retailers —- Consumers
A wholesaler is an intermediary between manufacturer and retailer. Example: BPR
(ii) Retail Trade It refers to purchasing relatively small quantity of goods from wholesalers and selling them to ultimate consumers.
Chain of Retail Trade
Wholesalers —- Retailers —- Consumers
A retailer is an intermediary between wholesaler and consumer. Example

Question. Retailar performs a function of retail trade. He is engaged in the sale of goods and services directly to the ultimate consumers. Retailer represent the final stage in the distribution process. Explain how wholesalers/Manufacturers are benefitted by the retailers.
Answer : Following are the services of retailers to the wholesaler/manufacturer
(i) Help in Distribution of Goods Retailers help in the distribution of products by making them available to the final consumers, thus, creating place utility.
(ii) Personal Selling By undertaking personal selling efforts, the retailers relieve the producers from this activity and greatly help them in the process of actualising the sale of the products.
(iii) Enabling Large-scale Operations On account of retailer’s services, the manufacturers/wholesalers are freed from the botheration of making individual sales to consumers in small quantities.
(iv) Collecting Market Information As retailers remain in direct and constant touch with the buyers, they serve as an important source of collecting market information about the tastes, preferences and attitudes of customers.
(v) Help in Promotion Manufacturers and distributors carry on various promotional activities in order to increase the sale of their products. Retailers participate in these activities and help to promote the sale of the good.

Question. 365*12 is a company with a big store in Kolkata, West Bengal. It aims at satisfying practically every customer’s need under one roof. It has a number of departments, each one confining its activities to a specific kind of product. Identify the store highlighted here and state its disadvantag
Answer : The store highlighted here is departmental store.
Disadvantages of departmental stores are
(i) Lack of Personal Attention Because of large scale operations, these stores are not able to give personal attention to each and every customer.
(ii) High Operating Costs Since these stores provide a number of additional services to their customers, therefore their operating costs are also high.
(iii) High Possibility of Loss These stores operate on large scale and incur high operating costs. Therefore, their exposure to risk is also high.
(iv) Inconvenient Location These stores are generally located in a central location. Customers encounter traffic problems while visiting these stores. Also, it is not convenient for the purchase of goods that are needed at short notice.

Question. On an individual firm level, the international trade opens many new opportunities and prospects. In the light of the statement, explain any five advantages of international trade to the firms.
Answer : Advantages of international trade to the firms are
(i) Prospects for Higher Profits When prices in the domestic market are low, firms can earn more profits by selling their products in those countries in which prices are high.
(ii) Prospects for Growth When the domestic demand for a firm’s product or services start getting saturated in the domestic market, then firms can considerably improve prospects of their growth by venturing out in the international market.
(iii) Way Out to Intense Competition in Domestic Market Highly competitive domestic market drives many companies to go international in search of markets for their products.
(iv) Increased Capacity Utilisation Many business and industrial enterprises have unused capacity, that can be efficiently utilised for further production. Thus, surplus production can be used to generate extra profits from foreign trade.
(v) Improved Business Vision Most enterprises have an urge to grow, to become more competitive, to diversify and derive the benefits of going global through international trade.

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