question_answer

A lady sells newspapers to a lumberman. She claims to her husband that she has started with a business. Husband claims that it is not business because she is not doing it regularly but she clams that she sells newspapers every month. Is it a business? Clarify.

Answer:

Ans.     No it is not a business. Business has following characteristics:

(a) It is an Economic Activity

(b) It involves production or procurement of goods and services.

(c) It includes sale and exchange of goods and services for the satisfaction of human

(d) It deals in goods and services on a regular basis.

(e) It aims at earning profit.

(f) There is uncertainty in return.

(g) There is an element of risk

In this case, following features of business are present:

(a) It is an Economic Activity

(b) It involves production or procurement of goods and services.

(c) It deals in goods and services on a regular basis.

Following features are missing:

(a) Selling newspapers does not involve sale and exchange of goods and services for the satisfaction of human needs.

(b) Selling newspapers does not aim at earning profit.

(c) There is no uncertainty in return.

(d) There is no element of risk