206 7arrr6o, asatd@ Business Studies_l2

NCERT EXERCISES
iiulriple Choice euestions 7. Higher working capital usually results in:
1. The cheapest souri:e of finance is: (a) higher current ratio, higher risk and h
(a) debenture. profits.
(b) equity share capitat. (D) lower current ratio, higher risk and proEtl,
(c) preference share. (c) higher equity, lower risk and lower profirr
(d) retained earning. @ lower equity, lower risk and higher protri.
Ans. (a)
Ans. (d)
8" Current assets are those assets which get conr
2. A decision to acquire a new and modern plant
to into cash:
"upgrade an old one is a: (a) within six months.
(a) financing decision. (b) within one year.
(6) working capital decision. (c) between one and three years.
(c) investmentdecision. (d) between three and five years.
(d) none ofthe above Ans. (6)
Ans. (c) 9. Financial planning arriyes at:
3. Other things remaining the same, an increase in the
(q) minimising the external borrowing tr1,
tax rate on corporate profits will: to equity issues.
(a) make the debt relatively cheaper. (b) entering that the firm always have
(b) make the debt relatively the dearer. more fund than required so that there rr
paucity of funds.
(c) have no impact on the cost of debt
(c) ensuring that the firm faces neither a s
(d) we can,t say.
nor a glut of unusable funds.
Ans. (a) (d) doing only what is possible with the fun&
4. Companies with a higher growth pattern the firms has at its disposal.
are likely
to: Ans" (c)
(a) pay tower dividends. 1S" Higher dividend per share is associated
xifh:
(r) pay higher dividends. (u) high earnings, high cash flows, unstable
(c) dividends are not affected by growth and higher growth opportunities.
considerations. (b) high earnings, high cash flows, stable
(d) none ofthe above and high growth opporfunities.
(c) high earnings, high cash flows, stable
Ans. (a)
and lower growth opportunities.
5. Financial Ieverage is called favourable ift
@ high earnings, low cash flows, stable
(a) Return on Investment is lower than the cost and lower growth opportunities.
of
debt. Ans. (c)
(r) ROI is higher than the cost of debt. 11. A fixed asset should be financed through:
(c) Debt is easily available. (a) a long-term tiability.
(A The degree of existing financial Ieverage
is low. (b) a short-term tiability.
Ans. (D) (c) a mix of long and short_term liabilities
6. Higher debt-equity ratio results in: Ans. (a)
(a) Iower financial risk. 12. Current assets ofa business firm should
be
(6) higher degree ofoperating risk. through:
(c) higher degree offinancial rislc (a) current liability only.
(d) higher EpS.
(b) long-terrn liability only.
(c) both types (i.e. long and short term
Ans. (c)
Ans. (c)
 Financial Marasement 211

*"Whichofthefollowingisafactoraffectingdividend
tui*verlobieclive Type Questions [l Motkl decision?
' ;h of the following is an objective of financial (a) Cash flow Position
, - ning? (r) StabilitY of earnings
. Optimum utilisation of resources
' (c) Contractualconstraints
Link Present with future
Ensures availability of funds
wherever required @ All of these
: -\ll of these .,\lis. (r0
S" is a factor affecting working capital
------
of requirement of a business'
\ -- is a tactor affecting the capital structure (D) Business cycle
; c0mPan]. (u) Scale of operations

.i) Cash flow position (D) Flexibility (c) Production cycle (4 All of these
. ) Control
('0 All of these Ans. (rfl
is not
,ir ,u. to a situation when a company
capital will be more able to meet its fixed financial
obligations'
The requirement for working
risk
for a business concern manufacturing: Financial leverage (D) Financial
-refers
(a)
(c) Bread (D) Coolers (d) None of these
(a) nor (D) (c) Financial planning
(c) Both (a) and (D) (d) Neither
Atrs. (b)
( l,)
210 a*.ead@ Business Studies 12
"6g#ee'e
EBIT - EPS AnalYsis
III
4,00.000
EBrf i
4,00,000 4,00,000
1,50,000
tnterest i
1,00,000
I
4,00,000 3,00,000 2,50,000
EBT
1.50,000 1 ?5 000
Tax 2.00.000
2,00,000 1,50,000 I ?5 0(x)
Profit aller tax
20 0(x) 15,000
No. of sirares of { 100 each 30,000

EPS { 6.67 < 7.5 { 8.33

The increasc in EPS from { (
6'61 t.o ( 7.5 in Case I and II and then fuither to 8.33 in Case III shows
that the

is employing trading on equity to increase retrirn orr equity by ustng more of debt
in its capital structure'

CASE PROBLEM
'S' Limited is manufacturing steel at its plant in India' lt is (.a) The success of business essentially depends

enjoying abuoyant demand for its products as economic growth carefully the flnancial plan has been prepare:
is about 1% - 8% and the demand for steel is growing' It is incorporating intelligent estimates of curer"
planning to set up a new steel plant to cash on the increased future capital requirements in the financial
demand. It is estimated that it will require about { 5,000 crores a business entetprise is saved of the proble::-
to set up aud about { 500 crores of r'vorking capital to starl the surplus or shorlage of funds. It links the
new plant. of the company with its future'
(b) The statement of financial objectives, policie'
&uesgiems
procedures in the form of a financial plan
1. Describe the role and objectives of financial coordination between different functional arer'
management for this company.
the business.
Ans. The most important objective of financial management (c) Without the flnancial plan, companies may ha-':
is weaith maximisation which means maximisation of face problems of excess or shortage of fundr.
the market value of equitY shares.
(rf It would be difficult to coordinate the
The role of financial management for 'S' Ltd' is as
of the financial department withoiit
follows.
planning.
(.ai) lt helps in determining the size and composition (e) Financial pianning helps financiai mauager'
offixed assets.
financial control and helps the company to
(b) it helps in determination of cur:rent assets and its
for the future.
break up for optimum r-rtilisation.
Financial Plan of S Ltd:
(c) It helps to detetmine the sources fiom wirich funds
should be Procured.
Totai fund required : { 5,000 crores
Workrng capital required : { 500 crores
(4 It helps in deciding the capital structure of the
: ( 5,500 crores
business.
(e) It influences their items of statement of profit and This fund is raised through loan of{ 2000 crores. ea'

loss as the financial expenses are a part of it' secured andunsecured and equity shares of{ 1ltr
2" Explain the importance of having a financial plan crores each. The fixed assets, including investmer'
for this company. Give an ilnaginary plan to support amount to ( 1 000 crores and curent assets are ofval:
your anslver. T I 500 crores.
Ams. Financial plans are important because they facilitate The makes Debt-equity Ratio 4 : 1 and Curre:
imposition of financial control throughout the Ratio 3 : 1 which are favourable.
organisation.
 226 aaga#n'" ct'til.@ B:usiness Studies-l2
"*-*ru--

f
r

d
d

til

PAGENO. \
DATE: I I

PRACTICE QUESTIONS
4. The requirement of working capital is affected br':
Very Short Answer/Obiective Type Questions [I Mork]
(a) Nature of business (b) Business cycle
1. Capital budgeting decisions are related to investment in (r) Seasonal factors (d) A11 of these
5. Capital stnrcture refers to the proporlion between:
(a) Long-term assets (a) Fixed assets and current assets
(ll) Short-tem assets (b) Debts and equitY
(c) Fixed assets (c) Fixed assets and working capital
(d) Both (a) and (b) (@ None of these
2" Working capital means the portion of capital invested 6. refers to investment in long-term asse:
in: 7. refers to the capital required for c:
(") Long-termAssets (D) Short-term assets to day working of an organisation.
(c) Fictitious assets (rfl Intangible assets I is the primary objective of flnancr
3. If ROI is more than the rate of interest, in this case: management.
(a) Profit eamed by the equity shareholders increases' 9. 'Production cycle'does not affect the requitement
(b\ Profit eamed by the equity shareholder decreases. working capital of a company. (True/False)
(.) Interest eamed by the debentureholders decreases. 1&. Capital budgeting desisions are very crucial for
@ lnterest earned by the debentureholders increases' business. (True,tFalse)
 F ,:-,:, - \larkets 239

TJUESTIoN BANK
(c) SafetY of transactions
Que$ions [l Mork]
Ecr/Obiecrivelype (d) Alt of these
of SEBI?
lrt llorving IS an obiective Ans. (fl
securities market is the market for
short-term funds meant
,rI intermediaries of t
(r.
_ nrl the rights and interest
of investors for a of uPto 1 Year'
for use Period
and code of conduct (b) Money
:i rn of fair practices (a) Capital market of^market
these
r *turities market (c) Financial market (r0 None
purpose
for carrying out the
il**i"*rcharges a,ns. (b)
rf, rle Act capital through
primary market
9. A company can raise

note, issued in the form of: shares

an unsecured promissory shares
(6) Preference
iS
period w hich @) EquitY
] ilrate with a fixed maturitY (c) Debentures @) All of these
Il1 15 days to
1 2 months.
tsl (b) Call money Aas. (d)
f - - ::U(J bill are rePresentedbY
(d) Trade Bills t fi. OwnershiP securities
m [_ :r nr ercial paper (D) Loan
(a) Stock
(d) Debentures
in (c) Debt
a method of floatation
ilbh of the following is
Ans. (a) and
.'r market? a market for creation
IS
riler for sale (D) Private Placement 11. bonds etc'
assets like shares'
(4 AU of these exchange of financial
;ltghts issue
,{ns. Financial market
and the "' and are competing intermediaries
is link
a between the savers r

in a financial sYstem'
::trlrS.
(D) CaPital market Ans. Banks, frnancial
market
. Financial market funds/
(4 None of these a market for short-term
PrimarY market 13. to one Year'
of maturitY is uP
securities whose Period
the trading
is the first step in Ans. MoneY market
s -. r I ir of the following
-ccdure'l isanegotiableinstrumenttransferahle
14.
rvith a fixed maturity
- Placing an order by endorsem"*t lJoI"ri'ery
--
- OPen a Demant Account daYs to one Year'
Period of 15
, \greement with a broker
Ans. Commercial PaPer
.,', Settlement of account securities which are
deals with the new
15.
issued for the first
time.
of
a regulatory function
\\ hich of the following is Ans. Primary market and sales of
.EBI?
Primary market involves purchase
bids by companres ""
1{r.
,r) Regulation of takeover (True/False)
.*O,tn*"securities' ^ .:r:^^ L.r,
b) Controtling insider tradingprotection
(t) Taking steps for investors
publishing information
Am* F,i-.e. ^ n'i*i?iJ'Tiilil:ff:J:T
the new companl
;il:::; ;:
rri) Conducting t"t"'*t and to the investors'
existing companies
useful to all market ParticiPants for short-term funds'
is a market
1?' N{oney market
E ra)
(True/False)
WhichofthefollowingisafunctionofStock assets whose
-[r,.ie. as money market deais in monetary
Ans.
Exchange? is up to one year'
period of maturity
kl Pricing of securities
for sPeculation
irl ,.rrt*ng scope
 Financial Markets 249

PAGE NO, /
DATE: I I

F---

cTrcE QUESTToNS
S hort Answer/Obiective Type Queslions [I Mo rk] (c) Settlement of account

\\hich of the following helps to eliminate the use of stock

@ Selection ofa broker
3. The functions of SEBI are:
;ertificates by placing stock transactions on computers?
(a) Regulatory functions
rc/) Demat account
lb) Developnrent functions
11,) Securities Exchange Commission (c) Protectivefunctions
(c.) Depository Trust Company (c{\ Ali of these
td) Federal Depository Insurance Corporation 4. Eliminatron of problems on transfer of shares such as
The last step in the Trading Procedure on a Stock loss. theft and delay is the benefit of

Exchange is;
(a') Depository Services
(b') Demat Account
i./) Placing an order
(c) Current Accouut
(1,) Executing the order (d) Fixed Account
 250 coatd@ Business Studies-l2
"a?.rAe
5. What is the minimum amount of Treasury Bill?
( Short Answer Type euestions [3/{
(.a) t 2s,000 (6) t 10,000
(c) { 15,000 25. Different countries adopt different stock
i.
(4 t 20,000 to show the trend of market and indi;,f
6. refers to the process in which securities fluctuations in stock market. Menrio- --:*
are allotted to institutional investors and some selected indices used by different countries.
indir.iduals. fQuestion from \
7 is a method of issuing securities through 26. SENSEX was launched in 19g6 and is u_.=: .a.
an on-line system of stock exchange. BSE. It has been an important indicarr.: ::
Stock Market. It is closely obsen,e,J :,.
researchers and other concemed instirur:,:-"
market lor money market instruments.
Describe the importance of SENSEX u_r:: :-,
I and
maintain accounts of dematerialised shares. fQuestion from \
t$" Securities and Exchange Board of lndia (SEBI) was 27. List some examples of the malpractices in c --iuru
set
which necessitated for go\ ernment to s.,: _:
up in 1978. (True/False) -
regulatory body
Il. We must open a bank account before starling trading in -SEBI.
securities. (True/False) Long Ansrer T)rpe euesrion t5l6 flctl
t2. Financial market provides liquidity to financial assets.
28. Explain the following money market l""E-{
(True/False) (a) Call Money (6) Treasury B_.
13. Name the two major altemative mechanisms through (c) Commercial Paper (d) Certificare :. I
which allocation of funds can be done. l.,lli .i**ia ll{il-li
tr4. Financial markets facilitate easy purchase and sale of Evsluqfion Bssed euestions
financial assets. Which function of financial markets
is 29. The directors of a company want to modernr,e m
highlighted here? [H{}.tSi and machinery by making apublic issue of sLres
15" List any two methods of floating new issues in the wish to approach stock exchange, u.hile ::;
primary market. manager prefers to approach a consultant ::: :r,r:
16, It refers to allotment of securities by a company to public issue of shares. Advise the dire*ors ;,.,,
approach stock exchange or a consultant tbr :_.-;
institutional investors and to some selected individuals.
issue of shares and why? Also advise about r:;
-"
Name it.
Ii{CITsi
l?. Name the instrument which is unsecured, negotiable,
methods which the company ma1,. adopt f:. ,:,
(. public issue of shares.
short-term in bearer form issued by commercial banla
L and -l{1. Securities and Exchange Board olrindia rSEE,
development fiaancial institutions. lH{}Fsl involved in training of intermedi.rlie, ur' rhe
iS. To u,hom Certificate of Deposit can be issue,l? market. Which function is perfornl'.,a U. Sgg
i9. List the major participants in the money market. 3t " 'Ganesh Steel Ltd.' is a large and credrnr.onhr
manufacturing steel for the Indian market. It n,: ,;
?{}. It is an institution which provides a platform fbr buying
to cater to the Asian mar-ket and decides to u.r.,3,; -
and selling of existing securities. Mention its name. 1,gwl,,
hi-tech machines. Since the investment is laree. .: :r- d:r*r
lH{}1'S; long-term finance. It decides to raise fund-s b . ,: rror!
31. Stock exchange gives investors the chance to d.isinvest equity shares. The issue of equity shares inr oi ., l*i
and reinvest. Which function of stock exchange is floatation cost. To meet the expenses of floar.:_. -
- ,lum

highiighted here? the company decides to tap the money marker.

lffr] f.]iJ
(a) Name and explain the money-marker in:::_ :n*
2?. Membership of a stock exchange is well regulated and
the company can use for the above purp..r"
its dealings are well defined according to the existing (b) What is the duration for which the cornp=: -lr
legal framework. What does this ensure to investing get funds through thjs instrument?
Public? lF!{} r}l (c) State any other purpose for which this in>i:- *
23. State one developmental function of SEBI. can be used tn€lhi AU-IEdrLE*t-
fdll Inilia i{ii3}
24. Enumerate three kinds of functions of SEBI.

:I
 tr'larketing Mrn,:gcment 263

,:D QUESTION BANK

tuiswer/Obiecriie Type Questions [I Morkl L There sn'e _-_-- levels of packaging.

tul 1 (6) 3
Th fectors affecting price determinationof a product
(c) 2 {d) 4
]C:
.4ns. (h)
rrl Product cost
q.
lOn Extent of competition *-- is an impersonal form of tommttnication by
a markcter to promote some good or service"
*r f tility and demand of the product
-fr -{Il of these (ai Personal selling (6) Advertising
(cJ Packaging (d) Labelling
Aus. (/,)
a r*tich of the following is not a characteristic of a
1fi. Amazon and Flipkart sel[ goods through:
gri+d brand name?
(tt) tlirctt channel ol'distribulion.
"r
r Distinctive (b) In local language (.h:) one level channel of distrihution.
,
- r Short and simple (d) Sufficiently versatile (c) t-wo Ievel channel of distribution.
(d) three level channt[ of distribution.
I rt]ich of the following is not an element of marketing :!ns. {ri.t
rit? 11. is a set ol'actual and potential buyers
tcl Product of a product or a service.
rD) Price Ans. \hrl"tt
rc) Consumer ProtectioP 1:. is a sociat process n'hereby people exchange
1d; Place goods and services for money or ftlr something of
--
value to thern,
' '\ liich *f the follorving is not an adv*nt*ge of trranding Ans. Markering
to the customers? 1 3. refers to producing goods of predetermined
(o) Ensures quality -- ---
specifications rvhich help in achieving uniforrnity and
(r) Helps in winning gifts/discounts consistenc-v in the outPut.
(c) Product identifitation Ars" Standarriisation
(d) Status symbol
74. means ctassif--ving the products into
\o) --*--*-- groups, on the basis sf its important
different
' Comniunicafion tools used by the marketertn inform characteristics.
antl persrtatle custorners ebcut their firm's prttdttcts Ans. Si2dipg
il re: 15. refers to a combination of various
ia) Personal seltrilrg (6) Pulrlic relations features relating to the produet or service like quality',
{ri Advertising (d) All tif thcse size, range, Package, lvarrantY etc'
, ii* Ans. Procltrct niix
- , The cornlionents of Ph1'sical distrihution is/arc: 16. 'Price' is an important element of marketing mix.
(a) 'Iransporta.ticn (D) Warehousing (fruelFalse)
(c) Order proccssing (d0 Alt cf these Ans. True, as it determines lhe amount of rnoney to be paid
.. ,,/) by a hnyer or receir,'e,cl by a seller in corrsideration of
-. \\'hich of tlte follcwing icnction of lahelling?
is not a purchasc of a procluct or a sen'ice.
{Sll F acilitates the use of product 17" N'Iarketing is a seicial process. (True/False)
(f) Product Promotion Ans. True, as it invoives interactions between people in order
(r:) Grading cf Product to satisi-rr tireir need and want'
(,/) Product identifrcation X8" Branding is an objective of rnarketing. (True/False)
' ns' (rr) Ans. F'alse, as brarrding is a function of mar"keting.

_)
 Marketing \4anagement 275

1
\

CTICE QUESTIONS
aim at maximising
Morkl 4. Which of the marketing philosophies
Shod Ansrver/Obiective lype Questions [1 profit by increasing the sales volume?
-:-.e packages of toffees are put into corrugated boxes (.a) Product concept (b) Marketing concept
,' .toring ut manufacturer's warehouse'
Which level (c) Production concept (tf Selling concept
for a
-'packaging is used hcre? 5. help in develoPing brand loYaltY
product.
,rr Primary Package
6. ref'ers to combination of Promotional
't Secondary Package tools used bY a marketer to comnrunicate
and Persuade
- ) TransPorlation Package customers to buY its Products'
is
,l) None of these 'l . assumes that product improvement
had a main
. *-hich marketing management philosophy tf.. f..V to ptofit maximisation of a firm'
of the society?
iocus on costumers'needs and well-being L Personai seiling is flexible'
ir) Production concept and the customers'
9. Branding benelits both the marketers
(True/False)
, h) Sales concePt
can be marketed'
rr') Marketing concept lil. Anything that is of value to the other
t-isi whal a[ can be marketed?
JHOTS]
lr0 Societal Marketing concept
of the product have?
Which of the following statement is incor:rect? 11. What impact can a good design
as a marketing
terms' tr2. Holv do customer support services
ta) Marketing and selling are two different
function Prove effective'?
1b) Marketing is a social Proaess' 13. Physical distribution as a function
of marketing involves
(.r) A consumer purchases a product. only
if it is List these decision areas'
t uL ,ru1o. decision areas'
value for money' ft{oTSl
perceived to give greater benefit or
of comes in a cardboard box'
(r1) Marketing activities start u''ith the development 1,1. A tube of toothpaste usually
Which level of packaging does it refer to? itloTsl
a Product'
286 adqzd"z ruad.'a Business Studies-l2

d.vLv LiEr q u'L-, 3 l\-'Is L'r-rlsl\

[l ]ficrkl (c) Less than t 20 lakhs

Very Shert &nswerl0bleetive Type Que*tions {
(d) More than { 10 lakhs but less than 20

tr. The consumer organisation 'VOICE' is situated in: r{ns. (a)

(u) Delhi (6) Mumbai 4, The consumer organisation
tConsumer

(c) Kotkata (d) Chennai Society of India (CGSI)' is located in:

(a) Mumbai
Ans. (a)
(r) Delhi
2. Which of the following is not a function of Non- (c) Chennai
government organisations (NGOs)? @ Kolkata
(a) Accelerating consumer awareness Ans. (a)
(b) Filing suits, complaints on behalf of consumers 5. The Consumer Protection Act, L986
consumer rights.
(c) Solving personal and marital problems of (r) s
(s) 4
consumers
(c) 6 (47
@ Collecting data on different products and testing
.lns. (c)
them when tt
6" A consumer can file a suit in
,4ns. (c) value of goods and service along with the compensatic
3. The complaints filed in the State Commission are claimed does not exceed t 20 lakhs'
where the value of goods and services, along with (a) State Commission
the comPensation claimed is:
(r) District Forum
(c) NationalCommission
(a) { 20 lakhs but less than {
More than 1 crore
@ SuPreme Court
(r) More than { I crore ;\ns. (b)
 Consumer Protection 287

\ complaint before the appropriate consumer lbrum 16. A consumer should look lbr ISI mark on electrical
.an be liled by: goods. (True/False)
,tl -l'iue.
anl- registered consumer's association Ans. as only the ISI marked electrical goods are
,5I a legal heir or representative of a deceased standardised goods.
consumer 17. Consumer protection is not important for businessmen.
r c ) the Central Government or anv State Government (True/False)
r/) All of these
Ans. i':':is"-. as it hclps in achieving the aim of long-term profit
ir maxin, i sation through consumer sati sfaction.
The electrical goods which are manufactured w,ith 18. Consumer protection is important for consumers.
iubstandard products can deprive a consumer of (True/False)
Ans. 'fi',re
. as rt heips to know about their rights and reliefs
t u) Right to choose
available to thein.
tb) Right to safet.v
(c) Right to be heard 19. What is meant by 'caveat emptor'?
(ct\ None of these Ans. 'Caveat emptor' means 'Let the buyer beware'.
h\ 20. What is meant by 'caveat venditor'?
-\ responsible consumer must Ans. 'Caveat vcnditor' means 'Let the seller beware'.
\u) exercise his/her rights
21. Why 'Caveat Emptor'approach changed to 'Cal'eat
(b) insist on cash memo
Venditor'?
(c) be quality conscious
(d) All of these Ans. The earlier approach 'Caveat Emptor'was 'Let the buyers
beware'but with the corning of the consumer protection
\ c{\
act, the approach changed to 'Caveat Venditor' which
Caveat Venditor implies: means 'Let the seller beware.'
(a) Let the buyer beware
(b) 22. Give some examples of exploitative and unfair trade
Consumer is king
(c) practices in which sellers engage.
Let the scller beware
(d) Seller is king Ans. Defective and unsafe products. adulteration, false and
. (c) misleading adverlising, hoarding, black marketing etc.

'- A consurner must check mark for electrical 23. What is the concept of 'Consumer Protection'?
goods, mark on food products and Ans. Consumer protection means protecting and promoting
mark on jewellery. the consumers' interest through speedy inexpensive
\ns. ISI; FPO; Hallmark redressal.

12. An orderpassed byNational Commission in a matter 24. What does Consumer Protection Act, 1986 aim at?
ofits originaljurisdiction can be appealed before the
Or

\ns. Supreme Court

What is the purpose of enacting the Consumer
Protection Act, 1986?
13. There are State Commissions and
District commissions in India. Ans. It aims at protecting and promoting the consumers'
interest through speedy and inexpensive redressal of
Ans. 365; 644
their grievances.
14. Business associations act as a means of consumer
,< What is the wide agenda of consumer protection?
protection. (True/False)
Ans. Trire . as they lay down the code
Ans. The agenda of consumer protection is education of
of conduct for their
consumer about their rights and responsibilities and
members which are expected to be followed while
redressal of their grievances.
dealing with the consumers.
15. Government protects the interest of consumers. (True/ 26. What is the purpose of enacting the Consumer
False) Protection Act. 1986?
Ans. 'l'nre. as the govemment acts as a means of consumer Ans. The purpose of enacting the Consumer Protection Act.
protection by enacting various legislations and regulations 1986 is to protect the consumers against unfair trade
such as the Consumer Protection Act. 1986. practices ofproducers or sellers.
 296 a,,ad.@ Bus' ess Studies_-l2
"area
PRACTICE QUESTIONS
Very Short Answer/Obiective
Type euestions inorkJ I.
[t J Mention one reason behind the impoftance
ol
tr. Whichofthefollo at protecting protection from consumers, point
and promoting of vierv.
rhe consumer,r,#:t#Ts i,l. Consumers might be exploited
bv uns
{") The Sale of GoodsAct 1930 expioitative and unfair trade practices.
(b) The Trade Marks Act 1999 Gr- .
examples ofsuch practices adopted
(c) The Consumer protectionAct by sellers.
19g6 r.1 A business must also lay emphasis on
(d) The Competition Act 2002 consumers and adequately satisfying
them. Gr,, .
2. When the value of goods and seryices, reason behind it.
along with
compensation ctaimed is more
th;{ i;;re, then the I 4; Pragya boughr an iron of ti reputed
complaint can be flled in 6iaird for t
but it caused at electric shock
(a) while 1t was beins
District Forum Pragya wants to exerclse her
(.h) Right' Identify the
State Commission under which she can be protected.
(tl Narional Commission j
lDelhi
5. Give any one responsibility of a consumer
(.d) None of these in
to obtaining a cash memo while
purchasing an
-t. Consumer protection act is applicable oil.
on:
(a') Immovable goods only [Foreigr
i *. Give any one responsibility of a consumer
(6) Movable goods only to obtaining a cash receipr while purchasing
in
(.) Services only machine.
a

(d\ All goods and services [AIl India

17 It the responsibility of the c onsumel
IS
;.. In case, the aggrieve d party is to bui
not satisfied with the standardised goods AS they provide
order of the district forum, he can quality
appeal in: Give few examples of such goods
(rt) Srare Commission
I lf . Why should a consumer look for
ISI mark on
(.b) High Court
goods?
(c) NationalCommission
f 9. Under three-tier machinery where can
(d) Supreme Courr a legal he.:
representative of a deceased consumer
5. Mrs. Jain should check the following fi1e a
standardisation when the compensation claimed is
mark while purchasing a gold ring { 25 lakhs?
for her daughter.
(a) Agmark 20. State how .Self-regulation by '"t'O
business,u",
(.b) Hallmark
(.) ISI
of Consumer protection. d ff :rf,
21. Give any one relief available to a consumer
@ FPO
due to consumption of an expired
who *f,-E
{i, A compliant, when the value date medicin.
of goods/service, along
with compensation claimed does
not exceed 22. Howdoes the ,Go'ernment,protect
are made in the appropriate District
Forum.
,n" ;',:':rd
7. If the aggrieveci parly is not satisfied
,r.;""TT;:';ili".*"*,.,s?actas"-"*',T;'"-ffi
a redressal agency, under the
another higher agency within
with the order of
act, he can appeal before protection? State.
S
_ [Dethi20ti
passing the oder.
_ days of 1"{. If Manu is not satisfied with the order of the Distnr:
Forum, where can he appeal?
8. District Fomm deals with the cases when the
compensation
clairned is more than { 20 lakhs. (True/False) Or
!:. Consumer rights benefits the consumers. Shweta filed a case against .Domestic
(True/False) Coolings Ltd..
in the 'District Forum,,but he was
!;]. The standardised mark ,AGMARK,is not satisfieO u,ith
used to check the the orders of the District Forum.
authenticiry of jerveliery. (True/False) Where can he appeai
fui1her against the decisions of
District Forum?IHOTSi