Question

Farhan , a young man , wants to provide employment to the local prople of his village . He decided to do the wholesale business of mibile phones made by the latest technique . But so many questions began to crop up in his mind : how will the goods be brought from distant places , how will the finance be arranged , and how will the information on his modern dusiness be conveyed to the people ? He consulted a business expert , Mr . Balram who gave him information on the auxiliaries to trede , which could solve his problem . Farhan understood what the expert told him . He employed 50 workers and started his business.
(a) Which economic activity is Farhan going to do ?
(b) On which part of business was the information given to Farhan by the business expert ?
(c ) If we add the answer of (a) to the answer of (b) which part of business shall we have?
(d) Explain the auxiliaries to trade which may solve the problem of Farhan , as suggested by the dusiness expert.

Answer 1

(a) Trade , which refers to buying and selling of goods and services with the objective of earning profit.
(b) Auxiliaries to trade - acetivities which are meant for assisting trade , i.e., services.
(c ) Commerce , which includes all those activities which are necessary for facilitating the exhchange of goods and services . (Commerce = Trade + Auxiliaries to trade)
(d) (i) Transportation removes hindrance of place by moving goods from thr places of production to the markets for sale .
(ii) Banking removes hindrance of finance by providing funds to a businessman for acquiring assets , purchasing raw materials and meeting other expenses.
(iii) Advertising removes hindrance of information by informing conusmers about the goods and services available in the market.