Classification of Business Activities

Both A and R are true, but R is NOT the correct explanation of A

Step 1: Evaluate Assertion A — Yes, it is TRUE. An ancillary small industrial unit must supply not less than 50% of its production to a parent unit (which could be another industry). Step 2: Evaluate Reason R — The reason states this creates financial dependence related to export incentives. This is partially true in context but does NOT correctly explain WHY the 50% condition exists. Step 3: The actual reason for the 50% condition is to define and identify the ancillary relationship — it ensures the unit qualifies as 'ancillary' by being a dedicated supplier of parts, components, sub-assembli

A person sells his old personal laptop to a friend once at a higher price than he bought it

Step 1: Recall the key characteristics of business — it must involve regularity of dealings, profit motive, and sale/transfer/exchange of goods or services. Step 2: The laptop sale is a one-time, isolated transaction. The characteristic of 'Regularity of Dealings' requires continuous and repeated transactions — not just one. Step 3: The chapter explicitly gives an example: 'If Mr. Thomas sells his watch at a profit, it will not amount to business. But if he is a regular dealer of watches, this will be called his business.' The laptop case is identical — a one-time personal sale. Step 4: A reta

A trader imports goods from one country and re-exports them to another country

Step 1: Define Entrepot Trade — the chapter defines it as trade where a trader belonging to one country purchases goods from another country and sells them to yet another country. Step 2: Example given in chapter: An Indian trader who purchases goods from England and sells them to Japan after arrival of goods at port is engaged in entrepot trade. Step 3: Entrepot includes BOTH import AND export together. The goods come in (import) and go out to a third country (export) — without being significantly processed. Step 4: Option A is wrong — entrepot is not about exporting to multiple countries fro

Genetic Industry, because it involves breeding and rearing of living organisms

Step 1: Recall the two sub-types of Primary Industry — Genetic and Extractive. Step 2: Genetic Industries are engaged in breeding of plants and animals for their use in further reproduction. The chapter specifically lists 'fish hatchery' and 'Growing of fish in ponds, rivers and canals' as examples of genetic industries. Step 3: Extractive Industries extract something from earth, water, or air — like mining, fishing from seas/rivers (natural sources), and logging. The key difference is that genetic industries BREED and REAR organisms artificially, while extractive industries take from nature d