Introduction to Business and Economic Activities

Flashcards covering human activities (economic vs. non-economic), definition and features of business, profession, and employment, business objectives, role of profit, and the classification of industry and commerce.

What are human activities classified into?

Economic and non-economic activities.

What is the definition of non-economic activities?

Human activities performed to satisfy personal, social, religious, cultural, and sentimental requirements without monetary expectations.

What is the definition of economic activity?

Activities that involve production, distribution, and consumption of goods and services for money or money's worth at all levels within a society.

Into which three categories are economic activities divided?

Business, Profession, and Employment.

How does Prof. Haney define business activities?

"Business activities are all those human activities which are directed towards the production and processing of wealth."

What are the ten key characteristics/features of business?

1) An Economic Activity, 2) Two Parties, 3) Profit Motive, 4) Production of Goods and Services, 5) Exchange of Goods and Services, 6) Dealings in Goods and Services, 7) Continuity in Dealings, 8) Uncertain Returns, 9) Element of Risk, 10) Customer Satisfaction.

What is the difference between monetary exchange and barter exchange?

Monetary exchange is exchange with money (e.g., buying a notebook for cash), while barter exchange is the exchange of goods and services for other goods and services (e.g., wheat for rice).

In business dealings, what is the difference between consumer goods and capital goods?

Consumer goods are items like tea, milk, or pencils; capital goods are items like machinery, plant, or furniture used for further production.

What is a profession?

A part of economic activities where a person uses educational knowledge and special skill to render services for earning income.

What are three examples of professional councils mentioned in the notes?

Bar Council of India (lawyers), ICAI (Chartered Accountants), and Indian Medical Association (doctors).

Why is a profession considered non-transferable?

A professional cannot transfer their practice to another person (e.g., a son or daughter) unless that person has also completed the required medical or professional education.

What is employment?

An economic activity in which people work for others under an employer-employee relationship.

What is the difference between wages and salary in employment?

Wages are paid daily or weekly, whereas salary is paid monthly.

What are the economic objectives of business?

Earning Profit, Searching New Customers, Innovations, and Best Possible Use of Resources.

What are the social objectives of business?

Supplying Quality Products, Avoiding Unfair Trade Practices, Employment Generation, Welfare of Employees, Helping to Solve Social Problems, and Contributing to the Welfare of the Society.

What is the mathematical formula for profit as stated in the text?

$$Profit = Revenue - Total cost$$

What are the eight roles of profit in business?

Survival, Reward for Risk, Reputation, Returns to Investors, Research and Development (R&D), Growth and Expansion, Increases Efficiency, and Means of Livelihood.

How are business activities broadly classified?

Industry (production and services) and Commerce (distribution).

What are the three types of Primary Industry?

Agriculture Industry, Extractive Industry (drawing products from soil, air, or water), and Genetic Industry (reproduction and multiplication of plants and animals).

What are Secondary Industries and their two types?

Industries that convert raw materials from primary industries into finished products; types include Manufacturing Industry and Construction Industry.

What is unique about the Construction Industry?

It is the only industry which creates immovable wealth (e.g., buildings, dams, bridges).

What is Tertiary Industry?

Industries that provide support services to primary and secondary industries, such as transport, banking, hotels, tourism, and entertainment.

What are the classifications of Home Trade?

Wholesale Trade (buying in bulk from producers and selling to retailers) and Retail Trade (selling in small quantities to final consumers).

What are the three types of Foreign Trade?

Import Trade, Export Trade, and Entrepot Trade (importing from one country to resell to another).

What are the seven Auxiliaries to Trade listed in the notes?

Transport, Warehousing, Insurance, Banking, Advertising, Mercantile Agents, and Communication.

What is the difference between indoor and outdoor advertising?

Indoor advertising targets people in their homes (newspaper, radio, TV); outdoor advertising targets people when they leave their homes (posters, hoardings, neon sign boards).