BUSINESS STUDIES MASTER

BUSINESS STUDIES (CODE 054)

CLASS XI – SA 1 (HALF-YEARLY EXAMINATION) - SET 2

Time Allowed: 3 Hours Maximum Marks: 80

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General Instructions:

1. This question paper contains 34 questions.
2. Marks are indicated at the right side of each question.
3. Answers should be brief and to the point.
4. Answers to the questions carrying 3 marks may be from 50 to 75 words.
5. Answers to the questions carrying 4 marks may be about 150 words.
6. Answers to the questions carrying 6 marks may be about 200 words.
7. Attempt all parts of a question together.

SECTION A

Q1. Which of the following is an example of an economic activity?
(a) A mother cooking food for her family.
(b) A teacher playing football with his son.
(c) A factory worker producing goods for sale.
(d) Attending a religious discourse in a temple.

(1)

Q2. The primary reward a businessman gets for bearing uncertainties and risks is:
(a) Salary    (b) Commission    (c) Profit    (d) Interest

(1)

Q3. In a Joint Hindu Family Business, the liability of the Karta is:
(a) Limited to his share in the business    (b) Unlimited
(c) Zero    (d) Shared equally with co-parceners

(1)

Q4. Registration of a partnership firm under the Indian Partnership Act, 1932 is:
(a) Compulsory    (b) Optional    (c) Illegal    (d) Required by RBI

(1)

Q5. [Image Based Question] Observe an image of a person inserting a plastic card into a computerized kiosk to withdraw cash at 2:00 AM. Which type of business service does this represent?
(a) Communication    (b) Warehousing    (c) E-Banking    (d) Insurance

(1)

Q6. The minimum number of members required to form a private limited company is:
(a) 2    (b) 7    (c) 10    (d) 50

(1)

Q7. A government company is any company in which the paid-up share capital held by the central or state government is not less than:
(a) 49%    (b) 50%    (c) 51%    (d) 100%

(1)

Q8. Organizations like the Reserve Bank of India (RBI) and Life Insurance Corporation (LIC) are examples of:
(a) Departmental Undertakings    (b) Statutory Corporations
(c) Government Companies    (d) Private Companies

(1)

Q9. The principle of utmost good faith in an insurance contract is technically known as:
(a) Causa Proxima    (b) Uberrimae Fidei    (c) Indemnity    (d) Subrogation

(1)

Q10. Assertion (A): E-business allows for 24x7x365 business operations globally.
Reason (R): The internet transcends geographical limitations and standard working time boundaries.
(a) Both A and R are true and R is the correct explanation of A.
(b) Both A and R are true but R is not the correct explanation of A.
(c) A is true but R is false.
(d) A is false but R is true.

(1)

Q11. B2B commerce specifically refers to transactions between:
(a) Business and Customers    (b) Business and Business
(c) Business and Government    (d) Customer and Customer

(1)

Q12. The practice of contracting non-core business activities to third-party specialists is called:
(a) Knowledge Process Outsourcing (KPO)    (b) Business Process Outsourcing (BPO)
(c) Joint Venture    (d) B2C Commerce

(1)

Q13. The concept of Social Responsibility is:
(a) Exactly the same as legal responsibility    (b) Broader than legal responsibility
(c) Narrower than legal responsibility    (d) Unrelated to legal laws

(1)

Q14. Which of the following is NOT an element of establishing business ethics in an organization?
(a) Top management commitment    (b) Publication of a 'Code'
(c) Maximizing profits by evading taxes    (d) Involving employees at all levels

(1)

Q15. Assertion (A): Departmental undertakings lack operational flexibility and autonomy.
Reason (R): They are subject to strict government rules, regulations, and direct budgetary controls of the parliament.
(a) Both A and R are true and R is the correct explanation of A.
(b) Both A and R are true but R is not the correct explanation of A.
(c) A is true but R is false.
(d) A is false but R is true.

(1)

Q16. The apex banking institution that controls the entire banking system in India is:
(a) State Bank of India (SBI)    (b) Punjab National Bank (PNB)
(c) Reserve Bank of India (RBI)    (d) ICICI Bank

(1)

Q17. A massive corporation that operates in multiple countries, like Coca-Cola or Samsung, is called a:
(a) Global enterprise (MNC)    (b) Public sector enterprise
(c) Small scale industry    (d) Joint Venture

(1)

Q18. Which of the following is NOT a recognized form of business organization?
(a) Partnership Firm    (b) Cooperative Society
(c) Marketing Department    (d) Joint Stock Company

(1)

Q19. The concept of completely separating "ownership" (shareholders) from "management" (Board of Directors) is a key feature of:
(a) Sole Proprietorship    (b) Partnership    (c) Joint Stock Company    (d) HUF Business

(1)

Q20. Investing funds in pollution control equipment and effluent treatment plants is a part of a business's:
(a) Economic objective    (b) Social responsibility
(c) Personal objective    (d) Legal evasion strategy

(1)

SECTION B

Q21. 'Sunrise Enterprises' regularly produces and sells solar-powered lamps to earn a profit. However, last year, a sudden change in government policy regarding solar subsidies drastically reduced their profit margins, causing them unexpected financial strain. This scenario demonstrates a key characteristic and a specific concept of business. (a) Identify the characteristic of business that states profit is not guaranteed. (b) Explain the concept of 'Business Risk' and state one of its causes highlighted here.

(3)

Q22. Mr. Kapoor took a marine insurance policy for his cargo ship. He intentionally hid the fact that the ship's navigation system was highly faulty and prone to failure. During the voyage, the ship hit a reef due to navigational errors and the cargo was damaged. When he claimed compensation, the insurance company rejected it after discovering the hidden defect. Identify and explain the specific principle of insurance violated by Mr. Kapoor.

(3)

Q23. A manufacturing company, 'PureAir Ltd.', was found dumping its untreated, toxic chemical waste directly into the nearby village river, causing severe water pollution and health issues. The local community protested, stating that the company is violating its basic duties. Explain the concept of 'Social Responsibility' and state why it is necessary for a business to assume such social responsibilities (mention any two reasons).

(3)

OR

'Alpha Corp' has recently implemented a strict code of conduct for all its employees. The top management regularly communicates the importance of honesty, transparency, and fair dealings with customers. They have also established a confidential helpline for employees to report any unethical behavior anonymously. Identify the core concept discussed here and outline any two elements required to make it effective in an organization.

Q24. Reena runs a small textile boutique. She needs to send ₹50,000 urgently to her fabric supplier located in Delhi to clear an invoice. She uses an electronic fund transfer system through her mobile banking app, and the money is transferred to the supplier's account in batches after a few hours. Identify the specific electronic fund transfer system Reena used. Differentiate this system from RTGS on any two bases.

(3)

SECTION C

Q25. Mr. Anil is running a successful grocery store as a sole proprietor. His business has grown substantially, and he now wants to open three more branches in different parts of the city. However, he is facing two major problems: he lacks the enormous funds required for this expansion, and he is unable to personally manage multiple stores simultaneously. He discusses this with his friend, Sunil, who suggests that Anil should convert his sole proprietorship into a partnership firm by admitting a few reliable partners. (a) Do you agree with Sunil's advice? Give two reasons to support your answer. (b) Explain two major limitations of a partnership firm that Anil should be deeply aware of before making this decision.

(4)

Q26. 'FreshBites' is a popular restaurant chain. Due to recent market changes, footfall decreased drastically. To survive and grow, they developed an interactive website and a mobile app. Customers can now browse the menu, place orders, and make payments online. FreshBites delivers the food to the customer's doorstep using their own delivery fleet. Additionally, they use the internet to seamlessly order raw materials in bulk directly from their regular wholesale suppliers. (a) Identify the two different scopes of e-business discussed in this case (e.g., B2B, B2C). (b) Explain three major benefits FreshBites achieved by shifting from traditional business to e-business.

(4)

Q27. 'GreenEarth Ltd.' manufactures eco-friendly packaging materials. The management strongly believes that their responsibility is not just limited to maximizing shareholder wealth, but also extends heavily to the people who work inside their factories and the people who buy their final products. They ensure a safe working environment, provide regular technical training to their staff, and supply high-quality, non-toxic packaging to their buyers at fair prices without utilizing any misleading advertisements. Based on the given scenario: (a) Identify the two specific interest groups towards which GreenEarth Ltd. is fulfilling its social responsibilities. (b) State two specific responsibilities towards each of these identified groups.

(4)

Q28. 'XYZ Tech' is an Indian IT hardware firm that wants to import advanced robotic machinery from a manufacturer in Japan. The Japanese exporter, however, is highly hesitant to dispatch the expensive goods because he is not sure about XYZ Tech's financial credibility and fears non-payment after delivery. XYZ Tech approaches its commercial bank in India for a solution so that the Japanese exporter gets an absolute guarantee of payment upon presenting the valid shipping documents. (a) Identify the specific banking document XYZ Tech's bank will issue to solve this international trade problem. (b) Briefly explain the concept of RTGS and NEFT as modern domestic banking services.

(4)

OR

'Secure Vaults' provides essential facilities to businessmen and farmers to keep their surplus goods safe from theft, fire, rain, and pests until they are demanded in the market. By absorbing the excess supply during the harvest season and releasing it into the market during off-seasons, they play a crucial role in stabilizing the prices of essential commodities. Furthermore, they offer additional value-added services such as grading, sorting, and packaging of agricultural produce before it reaches the final consumer. (a) Identify the specific business service provided by 'Secure Vaults'. (b) Explain any three major functions performed by this service that help in the smooth functioning of trade.

Q29. Neha and her three brothers inherited a large, ancestral business of spice trading from their late grandfather. The business is managed primarily by her eldest brother, who has the absolute power to take all major business decisions, while the other siblings simply share the profits and losses based on their birthright. This business has a specific legal identity under ancient Hindu Law. (a) Identify the exact form of business organization being run by Neha and her brothers. (b) What is the eldest brother officially called in this business? (c) State the liability of the eldest brother versus the liability of the other members (co-parceners) in this specific form of business.

(4)

Q30. A group of 50 local weavers in a remote village realized they were being continuously exploited by rich middlemen who bought their beautiful handloom sarees at very low prices and sold them at massive margins in city showrooms. The weavers decided to form a voluntary association, pooling their small financial resources to buy raw cotton directly from the wholesale market and selling their finished sarees collectively to eliminate the middlemen. (a) Identify the specific type of cooperative society formed by these weavers. (b) Explain any three merits of a cooperative society that will financially and socially benefit these weavers.

(4)

SECTION D

Q31. Mr. Sharma and his two friends want to set up a large-scale manufacturing unit for electric vehicle batteries in Gujarat. They estimate a massive capital requirement of ₹50 Crores, which they absolutely cannot pool from their personal savings alone. They plan to invite the general public to invest in their venture by issuing shares. They also want to ensure that if the business faces unforeseen massive losses in the future, their personal properties (like houses and cars) are not sold off to pay the business debts. Furthermore, they want the business to have a separate legal identity so it can buy land and enter into complex contracts in its own name, independent of the owners. They approach a business consultant to advise them on the best form of business organization and the steps required to legally form it. (a) Identify the most suitable form of business organization for Mr. Sharma and his friends. (b) Explain any three features of this form of organization that strictly align with their requirements. (c) Outline the first two major stages involved in the formation of this type of organization.

(6)

Q32. 'HealthFirst Ltd.' is a renowned pharmaceutical company that recently established a new manufacturing plant in Himachal Pradesh. To safeguard its vast inventory of raw materials and finished medicines, the company purchased a fire insurance policy worth ₹2 Crores from 'SafeGuard General Insurance'. A few months later, a severe fire broke out in the warehouse due to a short circuit. The warehouse manager, instead of calling the fire brigade immediately to mitigate the damage, waited for the senior management's approval, leading to extensive destruction. The total loss amounted to ₹1.5 Crores. When the company filed a claim, the insurance surveyor discovered the gross delay in calling the fire brigade. Consequently, the insurance company refused to pay the full claim amount. Meanwhile, HealthFirst Ltd. also needed to make urgent, high-value payments to its international suppliers in Germany and domestic suppliers in Mumbai on the same day. (a) Identify and explain the specific principle of insurance violated by the warehouse manager in the above case. (b) Can HealthFirst Ltd. claim the entire ₹1.5 Crores? Give a valid reason based on insurance principles. (c) Suggest one suitable electronic fund transfer method each for paying the domestic supplier and the international supplier securely.

(6)

Q33. 'TechNova Solutions' is a mid-sized IT firm operating from Bengaluru. Over the past year, the company has decided to shift its entire data storage and software testing operations to third-party service providers located in smaller cities where skilled labor is cheaper. This move has allowed TechNova to focus exclusively on its core competency—software design and client acquisition. However, the management is facing intense resistance from local communities who accuse the company of exploiting cheap labor and ignoring local environmental norms by disposing of electronic waste improperly. The CEO realizes that focusing only on economic objectives is heavily harming the company's reputation. He decides to set up a dedicated committee to frame a strict code of conduct for all employees and partners. He also plans to invest 2% of the company's profits into a local tree-plantation drive and a free computer literacy program for the underprivileged children in the area. (a) Identify the specific emerging mode of business (concept) TechNova is using by shifting operations to third-party providers. Explain two benefits of this concept. (b) Discuss the social responsibility of TechNova Solutions towards the 'Community' and 'Government'. (c) Briefly explain the concept of Business Ethics and identify one element of business ethics the CEO is actively applying here.

(6)

OR

'Global Auto Corp' is a massive automobile manufacturer based in South Korea, successfully operating in over 60 countries. They urgently want to enter the rapidly growing Indian market. However, they completely lack the understanding of local customer preferences and the complex distribution networks in India. They decide to legally collaborate with 'Bharat Motors', an established Indian automobile company with a vast network of dealers and strong brand loyalty. They form a new, independent entity, 'Global-Bharat Auto Ltd.', sharing ownership, risks, and technology. This collaboration proves highly successful, capturing 20% of the market share within two years. But recently, a consumer forum filed a serious case against the new entity, alleging that their latest car model does not meet the basic safety emission norms prescribed by the Indian Government, causing severe air pollution in metropolitan cities. (a) Identify the specific type of enterprise formed by Global Auto Corp and Bharat Motors. State three major advantages they gained from this business arrangement. (b) As a responsible corporate citizen, what is the role of business in environmental protection? Explain any two concrete steps Global-Bharat Auto Ltd. should take immediately to control pollution.

Q34. The Government of India has various enterprises functioning under its direct control to ensure the welfare of the public and balanced regional development. 'Suraksha Defence Equipments' is one such enterprise. It is a subdivision of the Ministry of Defence. Its finances are directly allocated from the annual budget passed by the Parliament, and all its revenue is deposited back into the government treasury. Its employees are civil servants subject to strict government rules. On the other hand, 'Life Insurance Corporation of India (LIC)' was created by a special act passed in the Parliament, which specifically defines its powers, functions, and rules. It has its own separate legal entity, can own property in its name, and its employees are not civil servants. LIC enjoys considerable operational autonomy compared to 'Suraksha Defence Equipments'. Both are crucial for the nation but operate under fundamentally different public sector frameworks. (a) Identify the specific forms of public sector enterprises represented by 'Suraksha Defence Equipments' and 'LIC'. (b) Differentiate between the two forms identified in part (a) on the basis of: (i) Formation, (ii) Legal Status, (iii) Flexibility/Autonomy, and (iv) Financial Autonomy.

(6)

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