CBSE Class 12 Business Studies Case Study Questions Business Environment MCQs

Read the source given below and answer the following questions :
Unique Ltd. is an electronic goods manufacturing company situated in Uttar Pradesh. It is earning low revenue in comparison to another electronic company ‘Pace Ltd.’ situated in Delhi. Both the enterprises are affected by the investors , customers, competitors and suppliers in their respective locations. At the same time both are also affected by economic condition, change in technology, etc.

Question. Economic condition, changes in technology are related to
(a) General forces
(b) Specific forces
(c) Both (a) and (b)
(d) None of the above

Answer: A

Question. Business Environment includes :
(a) All internal forces
(b) All external forces
(c) Both Internal
(d) None of the above

Answer: B

Question. There is variation in the revenue of company operating in Uttar Pradesh and operating in Delhi. This is related to which feature of Business Environment ?
(a) Uncertainty
(b) Relativity
(c) General and specific
(d) None of the above

Answer: B

Question. Customers and suppliers represent :
(a) General forces
(b) Specific forces
(c) Both (a) and (b)
(d) None of the above

Answer: B

Read the source given below and answer the following questions :
Two big banner movies were scheduled to be released on the same date. On the last moment release of one of the movies had to be postponed due to opposition of a group of people due to some unethical contents related to their religion was shown in the that movie. The other movie released on time and made huge profit as there was no competition and movie which was postponed suffered loss. “It may be difficult to know the extent of the relative impact of the social economic, political, technological or legal factors on change in demand of a product in the market.”

Question. When there is no competition then firms get :
(a) First mover advantage
(b) Warning signal
(c) Resource allocation
(d) None of the above

Answer: A

Question. Identify the dimension of Business Environment that delayed the release of movie.
(a) Economic
(b) Social
(c) Technical
(d) Legal

Answer: B

Question. The dimensions of Business Environment are :
(a) lndependent
(b) Interrelated
(c) Both (a) and (b)
(d) None of the above

Answer: B

Question. Which feature of Business Environment is highlighted here?
(a) Uncertainty
(b) Specific and general
(c) Dynamic
(d) Relativity

Answer: D

Read the source given below and answer the following questions :
Naman and Govind after finishing their graduation under vocational stream decided to start their own travel agency which will book Rail Tickets and Air Tickets on commission basis. They also thought of providing tickets within ten minutes through the use of internet. They discussed the idea with their Professor Mr. Mehta who liked the idea and suggested them to first analyse the business environment which consists of investors, competitors and other forces like social, political, etc., that may affect their business directly or indirectly. He further told them about the technological improvements and shifts in consumer preferences that were taking place and hence they should be aware of the environmental trends and changes which may hinder their business performance. He emphasised on making plans keeping in mind the threat posed by the competitors, so that they can deal with the situation effectively. This alignment of business operations with the business environment will result in better performance.

Question. “He emphasised on making plans keeping in mind threat posed by the competitors.” This is related to which importance of Business Environment ?
(a) Getting first mover advantage
(b) Getting warning signal
(c) Help in making plans and policy formulation
(d) None of the above

Answer: C

Question. “They should be aware of the environmental trends and changes which may hinder their business performance”. This is related to which feature of business environment ?
(a) All external forces
(b) Specific and general
(c) Relativity
(d) Dynamic

Answer: D

Question. “The Alignment of business operations with the business environment will result in better performance.” This is related to which importance of Business Environment ?
(a) Getting first mover advantage
(b) Getting warning signal
(c) Help in improving performance
(d) Help in making plans and policy formulation

Answer: C

Question. “First analyse the business environment which consists of investors, competitors and other forces like social, political, etc.” This is related to which feature of business environment ?
(a) All external forces
(b) Specific and general
(c) Relativity
(d) Uncertainty

Answer: B

Read the source given below and answer the following questions :
The name and taste of Coca-Cola is known to almost each and every individual in India as well as throughout the world. This carbonated soft drink holds the most market share in the soft drink market and got itself a special seat in each and every gathering. The Coca-Cola Company has on occasion introduced other cola drinks under the Coke name. The most common of these are Diet Coke, along with others including Caffeine free Coca-Cola, Diet Coke Caffeine free, Coca-Cola Zero Sugar, Coca-Cola Cherry, Coca-Cola Vanilla and the list goes on. It has capitalized on each and every opportunity to market itself effectively and place itself in the middle of every gathering. The main reason for such an outstanding placement of product goes to the way they have established the connection between every occasion and the need for Coke to be present there, product design and creative advertising.

Question. Which of the following is not a product of COCA-COLA?
(a) Diet Coke Caffeine free
(b) Coca-Cola Zero Sugar
(c) Coca-Cola Avocado
(d) Coca-Cola Cherry

Answer: C

Question. In the context of the above given case, identify one valid importance of Business Environment.
(a) Enables a firm to identify opportunities and getting first mover advantage
(b) Uncertainty
(c) Delay in action
(d) Pervasive function

Answer: A

Question. Identify the feature of Business Environment which The Coca-Cola Company managed to get in their favour.
(a) Complex
(b) Specific and general forces
(c) Futuristic
(d) Mental Exercise

Answer: B

Question. Which business environment did Coca-Cola majorly tap into ?
(a) Technological Environment
(b) Social Environment
(c) Political Environment
(d) Economical Environment

Answer: B

Read the source given below and answer the following questions :
Neel and Aakash after finishing their graduation under vocational stream decide to start their own travel agency which will book rail tickets and air tickets on commission basis. They also thought of providing tickets within 10 minutes through the use of internet.They discussed the idea with their professor Mr. Singh who liked the idea and suggested them to first analyse the business environment which consist of investors, competitors and other forces like social, political, etc., that may affect their business directly or indirectly. He further told them about the technological improvements and shifts in customer preferences that were taking place and hence, they should be aware of the environmental trends and changes which may hinder their business performance. He emphasised on making plans keeping in mind the threats posed by the competitors so that they can deal with the situation effectively. This alignment of business operations with the business environment will result in better performance.

Question. Identify the points of importance of business environment as stated by Professor Singh in the above situation.
(a) It enables the firm to identify opportunities and getting the first mover advantage
(b) It helps the form to identify threats and early warning signals
(c) It helps in tapping useful resources
(d) The it helps in assisting in planning and policy formulation.

Answer: B

Question. Identify the components of business environment highlighted in the above paragraph
(a) economic environment
(b) social environment
(c) technological environment
(d) political environment

Answer: C

Question. Neel and Aakash after finishing their graduation under vocational stream decided to start their own travel agency which will book rail tickets and air tickets on commission basis which dimension of business environment highlighted here.
(a) Economical
(b) Political
(c) Legal
(d) social

Answer: A

Question. Identify the features of business environment as discussed by Professor Singh with Neel and Akash.
(a) specific and general forces
(b) inter-relatedness
(c) dynamic nature
(d) uncertainty

Answer: A

Question. Which of the following is not an element of legal environment
(a) court judgement
(b) The extent and nature of government intervention in business
(c) Government regulations
(d) Administrative orders issued by the government authorities.

Answer: B

Read the source given below and answer the following questions :
The government all over the world are becoming more and more cautious towards the environment.To ensure the same, recently, many state governments passed an order to ban polythene bags since these are non biodegradable. As a result, the government also decided to give a subsidy to jute industry (bags). The minister said in the statement that they believe it will be helpful as income of people are rising and people can afford jute bag. After this subsidy, Aman saw great potential in jute multi-pocket bags business which was not established yet in India but had been flourishing in UK where he studied during his graduation. He launched the product and his business started to boom. So, more companies entered into the market with other articles and improvisations.

Question. Which business dimension is highlighted in the line,” As a result, the government also decided to give a subsidy to jute industry (bags).”
(a) Legal
(b) Political
(c) Economic
(d) Social

Answer: B

Question. Which merit of business environment is highlighted in the lines,” He launched the product and his business started to boom. So, more companies entered into the market with other articles and improvisations.”
(a) Identify opportunities
(b) Identified threats
(c) Assisting in planning
(d) Coping with rapid changes

Answer: B

Question. Which dimension of business environment is highlighted in the given lines,” To ensure the same, many state government passed an order to ban polythene bags since these are non biodegradable.”?
(a) Political
(b) Legal
(c) Technological
(d) Economic

Answer: B

Question. Which business dimension is highlighted in the line,” The Minister said in the statement that he believes it will be helpful as income of people are rising and people can afford jute bags.”?
(a) Legal
(b) Political
(c) Economic
(d) Social

Answer: C

Question. Which merit of business environment is highlighted in the lines, “After the subsidy Aman saw great potential in jute multi-pocket bags business which was not established yet in India but had been flourishing in UK where he studied during his graduation.”
(a) Identify opportunities
(b) Tapping useful resources
(c) Coping with rapid changes
(d)Assisting in planning

Answer: A

Read the source given below and answer the following questions :
Yogesh Agro limited started a new venture for distribution of harmful and chemical free fertilizers vegetables they conducted a survey to find out customer preferences for such vegetables.They found out that most of the customers were concerned about the harmful chemicals being used in growing the vegetables. They found out that 90% of the households were searching for alternatives. The company connected a group of agriculture experts to lay down the procedure for growing the vegetables by the farmers. They decided to train the farmers in new technology to grow chemical free vegetables according to new innovative methods. The experts also suggested soil management techniques through which farmers would be able to create an abundant and lasting harvest. Due to increased awareness for healthcare, demand for products of Yogesh agro limited increased and thus the business flourished

Question. “Due to increased awareness for healthcare demand for products of Yogesh Agro limited increased and thus the business flourished.”What feature/ characteristic of business environment is highlighted above?
(a) Specific and general forces
(b) Inter-relatedness
(c) Dynamic nature
(d) Relativity

Answer: B

Question. Which of the following is not a component of economic environment?
(a) Balance of payments and changes in foreign exchange reserves
(b) The nature of relationship of our country with foreign countries
(c) Expansion of transportation and communication facilities
(d) Volume of imports and exports of different items.

Answer: B

Question. “They found that most of the customers were concerned about the harmful chemicals being used in growing the vegetables. They found out that 90% of the households searching for alternative.” identify the dimension of business environment highlighted above.
(a) Economic environment
(b) Social environment
(c) Technological environment
(d) Political environment

Answer: B

Question. “They decided to train the farmers in new technology to grow chemical-free vegetable according to new innovative methods.” Identity the dimension of business environment highlighted above.
(a) Economic environment
(b) Social environment
(c) Technological environment
(d) Political environment

Answer: C

Question. “The experts also suggested soil management techniques through which farmers would be able to create an abundant and lasting harvest.” which dimension of business environment is highlighted here?
(a) Technological
(b) Legal
(c) Political
(d) Social

Answer: A

Read the source given below and answer the following questions :
Metlapp Networks and Technologies Ltd. is a leader in technology innovation in the United States, creating products and solutions for connecting the world. It has,, a large research and development team which invented the first smart watch, named as W-7. The watch besides showing the time, also monitors few health parameters like heart beat, blood pressure etc. While in search of markets abroad, the company found that in India, the reform process was underway with the aim of accelerating the pace of economic growth. The company decided to take advantage of simplified export procedure and removal of quantitative as well as tariff restrictions in India. It set up its office in Jamnagar with a view to capture the Indian market. In a short span of time, the company emerged as a market leader. Success of the company attracted many other players to enter the market. Competition resulted in reduction in prices, thereby benefiting the customers.

Question. In the above paragraph, two major concepts related to government policy have been discussed. Identify and explain these concepts.
Answer: Liberalisation and Globalisation are the two major concepts related to government policy that have been discussed.
Liberalisation: These economic reforms signalled the end of the licence-pemit-quota raj and were aimed at liberalising the Indian business and industry from all unnecessary controls and restrictions.
Globalisation: Globalisation means the integration of the various economies of the world leading towards the emergence of a cohesive global economy.

Question. Also, explain briefly any three impacts of these concepts on Indian business and industry.
Answer: The three impacts of reforms on Indian business and industry are outlined below:
Increasing competition: The Indian firms are facing lot of competition due to changes in the rules of industrial licensing and entry of foreign firms. This change is more apparent in the sectors which were earlier reserved for private sector only like banking, insurance, telecommunications, etc.
More demanding customers: With the easy availability of wider choice in purchasing better quality of goods and services due to high competition consumers have become more aware and demanding. The growing expections of the consumers has increased the pressure on the business firms.
Rapidly changing technological environment: With the entry of new firms which are far more superior in terms of technology the small firms are facing a lot of challenges. Moreover, the firms are constantly involved in innovating new products and upgrading present products with the help of better technologies in order to satisfy the customers demands.

Read the source given below and answer the following questions :
Naman and Govind after finishing their graduation under vocational stream decided to start their own travel agency which will book Rail Tickets and Air Tickets on commission basis. They also thought of providing tickets within ten minutes through the use of internet. They discussed the idea with their Professor Mr. Mehta who liked the idea and suggested them to first analyse the business environment which consists of investors’, competitors and other forces like social, political etc. that may affect their business directly or indirectly. He further told them about the technological improvements and shifts in consumer preferences that were taking place and hence they should be aware of the environmental trends and changes which may hinder their business performance. He emphasised on making plans keeping in mind the threat posed by the competitors, so that they can deal with the situation effectively. This alignment of business operations with the business environment will result in better performance.

Question. Identify and state the component of business environment highlighted in the above Para.
Answer: Technological Environment is the component of business environment highlighted in the above Para. 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.

Question. State any two features of business environment as discussed by Professor Mehta with Naman and Govind.
Answer: The two features of business environment as discussed by Professor Mehta with Naman and Govind are as follows
Dynamic nature: It is dynamic in nature and keeps on changing due to technological upgradations, shifts in consumer preferences or increase in competition in the market.
Inter-relatedness: All the elements of business environment are closely interrelated. Therefore, any change is one element may necessitate corresponding changes in the other elements as well.

Question. Also state two points of importance of business environment as stated by Professor Mehta in the above situation.
Answer: The two points of importance of business environment as stated by Professor Mehta in the above situation are described below:
It enables the firm to identify opportunities and getting the first mover advantage: The dynamic business environment provides numerous opportunities for a business to evolve as per the changing needs. Therefore, early identification of the forthcoming opportunities helps an enterprise to be the first to exploit them instead of losing them to the competitors.
It helps the firm to identify threats and early warning signals: Sometimes the changes in the external environment may pose as a threat and hinder a firm’s performance. An awareness about the business environment helps the managers to identify such threats on time and take necessary decisions and action.

With changes in the consumption habits of people, Neelesh, who was running a sweet shop, shifted to the chocolate business. On the eve of Diwali, he offered chocolates in attractive packages at reasonable prices. He anticipated huge demand and created a website chocolove. com for taking orders online. He got a lot of orders online and earned huge profits by selling the chocolate. Identify and explain the dimensions of business environment discussed in the above case.
Answer: The various dimensions of business environment being referred to in the above case are as follows:
1. Social environment: Social Environment includes the social forces like customs and traditions, values, social trends, society’s expectations from business, etc.
2. Technological environment: 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.

A recent rate cut in the interest on loans announced by the banks encouraged Amit, a science student of Progressive School, to take a loan from State Bank of India to experiment and develop cars to be powered by fuel produced from garbage. He developed such a car and exhibited it in the Science Fair organised by the Directorate of Education. He was awarded the first prize for his invention. Identify and explain the dimensions of business environment discussed in the above case.
Answer: The various dimensions of business environment being referred to in the above case are as follows:
1. Economic Environment: It comprises of factors that can affect management practices in a business enterprise includes interest rates, inflation rates, changes in disposable income of people, stock market indices and the value of rupee etc.
2. Technological Environment: It 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.

‘Accent Electronics Ltd.’ was operating its business in Malaysia. The company started exporting its products to India when the Prime Minister announced relaxation in import duties on electronic items. The company appointed retailers in India who had direct online links with the suppliers to replenish stocks when needed. Identify and explain the dimensions of business environment discussed in the above case.
Answer: The various dimensions of business environment being referred to in the above case are as follows:
1. Political Environment: Political Environment includes political conditions such as general stability and peace in the country and specific attitudes that elected government representatives hold towards business.
2. Technological Environment: 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.