CBSE Class 12 Business Studies Business Environment VBQs Set 03

Question. The market is flooded with better quality toys of foreign origin. The result is fall in revenue of the indigenous or local companies as their products are much inferior and are also costlier in less demand in the market. Which dimension of business environment can be seen here affecting the local companies’ revenue?
(a) Social environment
(b) Technological environment
(c) Political environment
(d) Legal environment
Answer: (b) Technological environment

Question. ‘Twinkle Stars’ is a well-known resort for organising parties, especially for children. However, in past 6 months its popularity has reduced considerably as a new resort with better ambience and facilities has opened within its vicinity. Name the related feature of business environment which has influenced the business of ‘Twinkle Stars’ adversely.
(a) Totality of external forces
(b) Dynamic nature
(c) Interrelatedness
(d) Uncertainty
Answer: (b) Dynamic nature

Question. The organic food market in India is growing at 25-30 per cent which reflects a clear shift in consumer tastes and preferences. The current growth in the organic food market is driven by multiplicity of factors like rising health consciousness, changing lifestyles, in crease in disposable income and growing availability of organic food products in shopping malls, retail out lets and online. In context of the above case identify the features of business environment.
(a) Dynamic nature
(b) Inter-relatedness
(c) Both (a) and (b)
(d) Export orientation
Answer: (c) Both (a) and (b)

Question. Macro environment consists of which of the following:
(a) Political system
(b) Culture of the society
(c) Demographic factors
(d) All of the options
Answer: (d) All of the options

Question. Which one is not an element of internal environment?
(a) Money and capital market
(b) Marketing capabilities
(c) Operational Capabilities
(d) Personal Capabilities
Answer: (a) Money and capital market

Question. With this introduction of Photostate Machines in the market, the carbon paper industry was adversely affected. Which component of environment was responsible for it?
(a) Economic
(b) Political
(c) Technical
(d) All of the options
Answer: (c) Technical

Read the following text and answer question.

Over the years, e-business is growing as there is significant improvement in the Information Technology infrastructure over the last decade. For that Government has taken important steps in high speed internet connectivity. As a result, the broadband networks have not only become better but also more affordable. Additionally, Government is trying to make rural India connected through broadband – a great possibility for e-business to expand the retail market by reaching out to the most remote rural customer. Another catalyst strengthening the e-business segment is the country’s favourable demography. It has more than 50% of its population below the age of 25 and more than 65% below the age of 35. It is expected that, in the year 2020, the average age of an Indian will be 29 years, compared to 37 for China and 48 for Japan, this promises for phenomenal increase in e-business. Moreover, the penetration of the smartphone in a large section of the population has aptly addressed the problem of compute illiteracy. Not withstanding the fact that consumers also prefer e-business due to multiple factors like convenience, time etc.

Question. “Over the years, e-business is growing as there is significant improvement in the Information Technology infrastructure over the last decade.” Identify the dimension of business environment:
(a) Technological environment
(b) Political environment
(c) Economical environment
(d) None of the options
Answer: (a) Technological environment

Question. “For that Government has taken important steps in high-speed internet connectivity.” Identify the dimension of business environment:
(a) Political environment
(b) Legal environment
(c) Both (a) and (b)
(d) None of the options
Answer: (a) Political environment

Question. “Another catalyst strengthening the e-business segment is the country’s favourable demography. It has more than 50% of its population below the age of 25 and more than 65% below the age of 35.” Identify the dimension of business environment:
(a) Demographic environment
(b) Social Environment
(c) Economical environment
(d) None of the options
Answer: (a) Demographic environment

Question. The various legislations passed by the Government administrative orders issued by government authorities, court judgments as well as the decisions rendered by various commissions and agencies at every level of the government— center, state or local comes under which dimension of business environment:
(a) Political environment
(b) Legal environment
(c) Both (a) and (b)
(d) None of the options
Answer: (b) Legal environment

Read the following text and answer question.

Care Ltd. is a company which deals in hair products. It has its branches in all the parts of the world. However, the requirements of hair products are different in different parts of the world. This is due to the change in climate and lifestyles of people in the different countries. The market in which it is dealing is known for awareness of health. The more the awareness the more is the demand for such products . Company knows that the demand for these products is unpredictable as new products keep on coming and the industry keeps on changing frequently. There is a research and development department which keeps on updating the latest changes . However the outside business environment is characterized by changing customer preferences, entry of new competitors making it change. A meeting was organized recently to understand the external business environment. However, after the meeting it was realised that business environment can’t be understood in totality it can only be understood by breaking it into its dimensions. The result of a successful meeting could be seen later in the performance of the company which created record sales in the coming year.

Question. This is due to the change in climate and lifestyles of people in the different countries.” Which feature of business environment is being highlighted here?
(a) Relativity
(b) Dynamic Nature
(c) Uncertainity
(d) None of the options
Answer: (a) Relativity

Question. Company knows that the demand for these products is unpredictable as new products keep on coming and the industry keeps on changing frequently. Identify the feature of business environment, which is being highlighted here?
(a) Complexity
(b) Relativity
(c) Interrelatedness
(d) Uncertainity
Answer: (d) Uncertainity

Question. “the outside business environment is characterized by changing customer preferences, entry of new competitors making it change.” Which feature of business environment is being highlighted here?
(a) Dynamic Nature
(b) Complexity
(c) Interrelatedness
(d) None of the options
Answer: (a) Dynamic Nature

Question. “After meeting, it was realised that business environment can’t be understood in totality it can only be understood by breaking it into its dimensions”. Identify the feature of business environment is being highlighted here?
(a) Complexity
(b) Interrelatedness
(c) Both (a) and (b)
(d) None of the options.
Answer: (a) Complexity

Read the following text and answer question.

Shobhit, aspires to work with a socially and environmentally committed company as he does not want to work just for monetary benefits but also the brand value of the company he works for in the society matters a lot to him. Therefore, he has joined Friendly Technologies a Noida-based Infotech company. The company has built India’s largest e-waste recycling plant. The company strives to be one of the leading players in this business which has huge potential not only in terms of generating huge revenues and profits but also wants to contribute to the environment issues that have become crucial worldwide. The company sees big business in the mountains of e-waste in Noida which produces 1,00,000 tonnes of e-waste a year. The company plans to make its millions by extracting metals such as gold and platinum from the e-waste piling up in the city. To start the business, the company has obtained a licence from U. P. Pollution Control Board.

Question. “The company has built India’s largest e-waste recycling plant”. Identify the dimension of business environment.
(a) Social environment
(b) Technological environment
(c) Legal environment
(d) None of the options
Answer: (b) Technological environment

Question. “The company strives to be one of the leading players in this business which has huge potential not only in terms of generating huge revenues and profits but also wants to contribute to the environment issues that have become crucial worldwide”. Which dimension of business environment is being referred here?
(a) Political environment
(b) Legal environment
(c) Social environment
(d) Economical environment
Answer: (c) Social environment

Question. “To start the business, the company has obtained a licence from U. P. Pollution Control Board.” Which dimension of business environment is being talked about.
(a) Economical environment
(b) Legal environment
(c) Both (a) are (b)
(d) Political environment
Answer: (b) Legal environment

Question. “The company plans to make its millions by extracting metals such as gold and platinum from the e-waste piling up in the city.” Which objective of business is being fulfilled?
(a) Organizational objective
(b) Social objective
(c) Personal objective
(d) All of the options
Answer: (a) Organizational objective

Question. Praveen started a wrist watch showroom in Mumbai India. He wants to sell wrist watch in France but he understands that conditions are different in different countries. The features of business environment highlighted here is___________
(a) Relativity
(b) Uncertainty
(c) Dynamic nature
(d) Complexity
Answer: (a) Relativity

Question. ‘HUNGER’ began its business by offering the classic combo of hamburgers and fries. But over time, their customers wanted healthier foods, so ‘HUNGER’ responded and began offering healthy alternatives such as salads, fruits, wraps and oatmeal. If ‘HUNGER’ hadn’t responded, they may have lost customers that wanted to eat healthier foods. The above case highlights one of the points related to the importance of business environment and its understanding by managers as___________
(a) it helps in coping with rapid changes.
(b) it helps in improving performance.
(c) it helps the firm to identify threats and early warning signals.
(d) it enables the firm to identify opportunities and getting the first mover advantage.
Answer: (a) it helps in coping with rapid changes.

Question. Business environment is ___________because the changes in the environment takes place very rapidly due to changes in the taste of customers, technology, government policies, etc.
(a) uncertain
(b) flexible
(c) rigid
(d) None of the options
Answer: (a) uncertain

Question. Standards should be_____________so that they can be modified as per changes taking place in the business environment.
(a) static
(b) flexible
(c) rigid
(d) stagnant
Answer: (b) flexible

Question. Match Column-I (Types of business environment features) with Column- II (respective meaning) then select the correct answers from the option given below:
Column I
(A) Totality of external forces
(B) Specific and general forces
(C) Inter-relatedness
(D) Dynamic nature
Column II
(i) Business environment is dynamic as it keeps on changing whether in terms of technological improvement, shifts in consumer preferences or entry of new competition in the market.
(ii) Different elements or parts of business environment are closely interrelated.
(iii) Business environment includes both specific and general forces.
(iv) Business environment is the sum total of all things external to business firms and, as such, is aggregative in nature.
(A) (B) (C) (D)
(a) (ii) (i) (iii) (iv)
(b) (iii) (i) (iv) (ii)
(c) (ii) (iii) (iv) (i)
(d) (iv) (iii) (ii) (i)
Answer: (d) (iv) (iii) (ii) (i)

Question. Match Column-I (factors constituting the general environment of business) with Column-II (respective meaning), then select the correct answers from the option given below:
Column I
(A) Economic environment
(B) Social environment
(C) Technological environment:
(D) Political environment
Column II
(i) Interest rates, inflation rates, changes in disposable income of people, stock market indices and the value of rupee are some of the economic factors that can affect management practices in a business enterprise.
(ii) The social environment of business include the social forces like customs and traditions, values, social trends, society’s expectations from business, etc.
(iii) Technological environment includes forces relating to scientific improvements and innovations which provide new ways of producing goods and services and new methods and techniques of operating a business.
(iv) Political environment includes political conditions such as general stability and peace in the country and specific attitudes that elected government representatives hold towards business.
(A) (B) (C) (D)
(a) (ii) (i) (iii) (iv)
(b) (i) (iii) (iv) (ii)
(c) (i) (ii) (iii) (iv)
(d) (iv) (iii) (ii) (i)
Answer: (c) (i) (ii) (iii) (iv)

Question. Match Column-I (Indian Company Acts) with Column-II (Respective Year) , then select the correct answers from the option given below :
Column I
(A) Industries (Development and Regulations) Act
(B) Foreign Exchange Management Act and the Imports and Exports (Control) Act
(C) Factories Act
(D) Trade Union Act
Column II
(i) 1926
(ii) 1948
(iii) 1947
(iv) 1951
(A) (B) (C) (D)
(a) (iii) (i) (ii) (iv)
(b) (i) (iii) (iv) (ii)
(c) (iv) (iii) (ii) (i)
(d) (i) (ii) (iii) (iv)
Answer: (c) (iv) (iii) (ii) (i)

Question. Match Column A (Different Company Acts) with Column B (Year of passing) then select the correct answers from the option given below :
Column I
(A) Workmen’s Compensation Act
(B) Industrial Disputes Act
(C) Consumer Protection Act
(D) Competition Act
Column II
(i) 1923
(ii) 1947
(iii) 1986
(iv) 2002
(A) (B) (C) (D)
(a) (ii) (i) (iv) (iii)
(b) (i) (iii) (iv) (ii)
(c) (iv) (iii) (ii) (i)
(d) (i) (ii) (iii) (iv)
Answer: (d) (i) (ii) (iii) (iv)

Question. Match Column-I (Impact of Demonetisation) with Column- II (Result/Effect) then select the correct answers from the option given below :
Column I
(A) Money/Interest rates
(B) Private wealth
(C) Public sector wealth
(D) Tax collection
Column II
(i) Rise in income tax collection because of increased disclosure
(ii) Decline in cash transactions , Bank deposits increased , Increase in financial savings
(iii) Declined since some high demonetised notes were not returned and real estate prices fell
(iv) No effect
(A) (B) (C) (D)
(a) (ii) (iii) (iv) (i)
(b) (i) (iii) (iv) (ii)
(c) (iii) (i) (iv) (ii)
(d) (i) (ii) (iiii) (iv)
Answer: (a) (ii) (iii) (iv) (i)

Directions: In the following questions, a statement of assertion is followed by a statement of reason. Mark the correct choice as:
(a) If both assertion (A) and reason (R) are true and reason (R) is the correct explanation of assertion (A).
(b) If both assertion (A) and reason (R) are true, but reason (R) is not the correct explanation of assertion (A).
(c) If assertion (A) is true, but reason (R) is false.
(d) If assertion (A) is false but reason (R) is true.

Question. Assertion: Business environment is a relative concept
Reason: It does not differ business in same country but differ from country to country.
Answer: (c) If assertion (A) is true, but reason (R) is false.

Question. Assertion:Business environment enables firms to identify threats and warning signals.
Reason: Environmental awareness helps an organization to identify threats to its business interest.
Answer: (b) If both assertion (A) and reason (R) are true, but reason (R) is not the correct explanation of assertion (A).

Question. Assertion: Enterprise design policies to arrange the required resources.
Reason: it can convert them into output they desires.
Answer: (a) If both assertion (A) and reason (R) are true and reason (R) is the correct explanation of assertion (A).

Question. Assertion: Political environment is related with governments responsibility towards business.
Reason: Government stability directly affects business scenario in a country.
Answer: (a) If both assertion (A) and reason (R) are true and reason (R) is the correct explanation of assertion (A).

Question. Assertion: New industrial policy decrease in role of public sector undertaking.
Reason: Economic reforms required government investments.
Answer: (c) If assertion (A) is true, but reason (R) is false.

Question. Assertion: Liberalization involves removal of restriction on movement of goods.
Reason: It increases liquidity in market.
Answer: (d) If assertion (A) is false but reason (R) is true.

Question. Assertion: Aim of demonetization was to remove corruption, black Money, indirect Funding etc.
Reason: Rise in Public sector wealth.
Answer: (c) If assertion (A) is true, but reason (R) is false.

Question. Assertion: Economic reforms includes LPG policy.
Reason: It includes mergers and acquisitions of business enterprises.
Answer: (b) If both assertion (A) and reason (R) are true, but reason (R) is not the correct explanation of assertion (A).

Question. Assertion:Increase in social awareness is part of business development.
Reason: it increases social values and ethics.
Answer: (a) If both assertion (A) and reason (R) are true and reason (R) is the correct explanation of assertion (A).

Question. Assertion: In India business is surrounded by various factors which directly or indirectly affect it.
Reason: President election in India affects directly Indian share market.
Answer: (b) If both assertion (A) and reason (R) are true, but reason (R) is not the correct explanation of assertion (A).