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Class 12 - Business Studies

Sample Paper 02

Maximum Marks: 40
Time Allowed: 90 minutes

General Instructions:

1. The Question Paper contains 3 sections.

2. Section A has 24 questions. Attempt any 20 questions.
3. Section B has 24 questions. Attempt any 20 questions.
4. Section C has 12 questions. Attempt any 10 questions.
5. All questions carry equal marks.
6. There is NO negative marking.

Section A
1. The process of getting things done through others is called:
a. Management
b. Planning
c. Efficiency
d. Effectively
2. In a company, there are four departments finance, marketing, production, and human resource
development. Identify the principle of management used in this company.
a. Unity of command
b. Scalar chain
c. Discipline
d. Division of work
3. With the introduction of a mineral water bottle in India Bisleri was able to capture the big market
share in India.
Which importance of the business environment is the highlight in the above case?
i. Helps in tapping resources
ii. Help in policymaking
iii. Improve performance
iv. Help to identify opportunity and getting a first-mover advantage
a. i and ii
b. ii and iii
c. iii and iv
d. only iv
4. Planning seeks to bridge the gap between:
a. Past and present position
b. Past and Future position
c. None of these
d. Present and Future position
5. Form of organisational structure in which it is easy to fix responsibility
a. Divisional Organisation

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b. Informal Organisation
c. Functional Organisation
d. Formal Organisation
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6. Match the following and select the most appropriate option-
(i) Brand name (a) Tag

(ii) Packaging (b) Devil of Onida

(iii) Label (c) Cardboard box

(iv) Brand Mark (d) Bata

a. (i) - (b), (ii) - (c), (iii) - (a), (iv) - (d)
b. (i) - (d), (ii) - (c), (iii) - (a), (iv) - (b)
c. (i) - (c), (ii) - (a), (iii) - (d), (iv) - (b)
d. (i) - (a), (ii) - (c), (iii) - (d), (iv) - (b)
7. Identify the feature of management as science when the principles are based on cause and effect
relationships.
a. Systematised body of knowledge
b. Universal validity
c. Based on practice and creativity
d. Based on existence of theoretical knowledge
8. Unity of direction is concerned with:
a. One Head One Plan
b. Planning by Production manager
c. One Head Different Plans
d. Planning by Employees
9. Booking of Railway tickets through the internet from home or office is an example of ________.
a. Economic Environment
b. Political Environment
c. Technological Environment
d. None of these
10. Objectives are generally set by ________.
a. middle level management
b. All of these
c. top management
d. supervisory level management
11. Freedom to take own decision is ________.
a. Centralisation
b. None of these
c. Delegation
d. Decentralisation
12. Under which philosophy of marketing, efforts are made to bring down the cost of production to the
minimum?
a. Marketing concept
b. Selling concept
c. Production concept

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d. Product concept
13. What happens when the management of an organisation gets weakened?
a. Production increases
b. Organisation progresses
c. Profit increases
d. Organisation faces heavy loss
14. The principles of management can be changed according to the prevailing situation in the
organization. This shows that management principles are:
a. Scientific
b. Universal
c. Flexible
d. Behavioral
15. Population is a component of the total ________ environment, while composition of population is
component of ________ environment.
a. social, economic
b. natural, legal
c. technology, political
d. ecomonic, social
16. Which of the following is not true about planning?
a. Planning is a mental exercise
b. Planning is necessary
c. Planning reduces creativity
d. None of these
17. The span of management refers to:
a. Length of term for which a manager is appointed
b. Number of managers
c. Number of members in top management
d. Number of subordinates under a superior
18. A sachet of new brand of shampoo attached to a magazine for use by its readers is an example of
________.
a. sampling
b. refund
c. rebate
d. full finance
19. Management is a ________ activity.
a. Individual
b. Group
c. Accounting
d. Supervisor Level
20. A proper place for everything and everything in its right place, with which order is this statement
connected as explained in the principle of order?
a. Material
b. Social
c. Both Material and Social
d. None of these
21. Name the concept which is related to integrating the economy with economies of other countries
through free trade and free movement of capital.

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a. Globalisation
b. Privatisation
c. None of the above
d. Liberalisation
22. Swachha Bharat Abhiyan started by the government of India is an example of which type of plan?
a. Strategy
b. Program
c. Rules
d. Procedure
23. What is the key to managerial posts?
a. Superiority
b. Responsibility
c. Accountability
d. Authority
24. The product concept focus on the following:
i. Quantity of a product produced
ii. Quality and performance of a product produced
iii. Place where the product is produced
iv. The company which produced the product
a. iv and i
b. only ii
c. i and ii
d. iii and iv
Section B
25. Management is:
a. A science
b. None of these
c. Both art and science
d. An art
26. How many principles are given by Henry Fayol?
a. 16
b. 20
c. 18
d. 14
27. The law of mining rules and regulations license required for running the business is an example of:
a. Political environment
b. Social environment
c. Economic environment
d. Legal environment
28. A comprehensive plan includes:
A. determining long term objectives
B. adopting a particular course of action
C. allocating resources
a. A and B
b. C and D
c. B and C
d. All of these

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29. Which organisation resists changes?

a. Formal
b. Informal
c. Functional
d. Both Informal and Formal
30. Which element of the marketing mix is responsible for making the goods available from the
manufacturer to consumers?
a. Product Mix
b. Place Mix
c. Price Mix
d. Promotion Mix
31. Profit is essential for covering the cost and risk of the business. Which management objective is
discussed here?
a. Personal objective
b. Individual objective
c. Social objective
d. Organizational objective
32. Which study is not done under scientific management?
a. Fatigue
b. Motion
c. Profit
d. Time
33. Trade Policy brings under control the ________.
a. Import Trade
b. Foreign Trade
c. Export Trade
d. Local Trade
34. Which of the following can offer expert opinion to the consumers?
a. Personal Selling
b. Publicity
c. Advertisement
d. Sale Promotion
35. An organization is providing basic amenities like schools and creches to employees. Which
management objective is highlighted?
a. Organizational objective
b. Individual objective
c. Personal objective
d. Social objective
36. The engineers of Videocon has produced the washing machines which spins the clothes faster
regardless of whether or not customers want that speed. It satisfies ________.
a. Marketing concept
b. Production concept
c. Product concept
d. Selling concept
37. Which of the following is a sales promotion activity?
a. Rebate
b. Discount

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c. All of these
d. Product Combination
38. What do we call the division of organisation structure on the basis of products?
a. Divisional organisation
b. Both divisional organisation and functional organisation
c. Formal organisation
d. Functional organisation
39. The basic aim of sales promotion tools is:
i. increase output
ii. increase demand by informing the target market
iii. increase price
iv. increase in sales volume
a. ii and iii
b. i and ii
c. iv and i
d. only ii
40. He is known as the father of scientific management:
a. F W Fayol
b. Henri Fayol
c. F W Maslow
d. F W Taylor
41. What creates fear in the minds of investors to invest in long term projects?
a. Privatisation
b. Liberalisation
c. Political Uncertainty
d. None of these
42. The first step of the organizing process:
a. Identification and division of work
b. departmentalization
c. comparing results
d. recruitment
43. Which of the following is not an objective of sales promotion?
a. To increase sales during slack period
b. To carry low stock
c. To win new customers
d. To introduce a new product
44. Organizing provides a clear description of jobs and related duties which helps in:
a. better supervision of employees
b. to encourage employees
c. better placement of employees
d. avoiding confusions and duplications
45. The quality and performance of the product is the main focus of which marketing management
philosophies:
a. Production Concept
b. Selling Concept
c. Marketing Concept
d. Product Concept

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46. Product specialisation is concerned with ________.

a. Normal Structure
b. Functional Structure
c. None of these
d. Divisional Structure
47. Discounts, coupons, contests, free samples and offering extra quantity etc., are the examples of ________.
a. Personal Selling
b. Sales Promotion
c. Channels of distribution
d. None of these

48. Assertion (A): Span of Management means for how many years an employee exists in a firm.
Reason (R): Narrow span of management results in a tall structure whereas a wide span of
management results in a flat structure.

a. Both A and R are true and R is the correct explanation of A.

b. Both A and R are true but R is not the correct explanation of A.
c. A is true but R is false.
d. A is false but R is true.
Section C

Question No. 49 to 54 are based on the given text. Read the text carefully and answer the
questions:

Castle Pvt. Ltd. is a toy manufacturing company. With the arrival of various foreign companies, it is
feeling the pressure of improving its business strategies. Last year the company planned well but even
though at the last required moments it could not bring change in its plans as the entire organization
had started implementing the decided plan. But this year the company wants to ensure success for a
better future. However, the organization knows that the external environment is changeable and
continues to vary in a fast manner. The company wants to prepare in advance for a better future. It has
decided to allocate a portion of its budget specifically for well-decided planning s it knows they are
going to be expenses like fees of professional experts, survey, etc.

49. It has decided to allocate a portion of its budget specifically for well-decided planning as it knows they
are going to be expenses like fee of professional experts, survey, etc. What do you understand
regarding the planning function from the given statement?
a. Planning is futuristic
b. Planning involves huge cost
c. Planning is time-consuming
d. Planning is continuous
50. However, the organization knows that the external environment is changeable and continues to vary
in a fast manner. What is the limitation of planning in the given statement?
a. It reduces creativity
b. It may not work in a dynamic environment
c. It involves huge costs
d. It does not guarantee success
51. But this year the company wants to ensure success for a better future. Which feature is highlighted
here?

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a. It is continuous
b. It is pervasive
c. It is futuristic
d. It involves decision making
52. Last year the company planned well but even though at the last required moments it could not bring
change in its plans as the entire organization had started implementing the decided plan. Which
limitation of planning is highlighted here?
a. It reduces creativity
b. It is a time-consuming process
c. It involves huge costs
d. It leads to rigidity
53. Name the step of the planning process after objectives are set and assumptions are made.
a. Follow up action
b. Evaluating courses of actions
c. Implementing the plan
d. Selection of alternative
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54. Castle Pvt. Ltd. has applied its best efforts to make successful plans this year but even then it's not sure
whether success will be achieved or not. Which limitation of planning has been pointed out here?
a. Planning leads to rigidity
b. Planning is a time-consuming process
c. Planning involves huge-cost
d. Planning doesn't guarantee success.
55. Which of the following have no representative professional organisations available?
a. Management
b. Medical
c. Accountancy
d. Law
56. Who is responsible for keeping the machine and tools ready for operation?
a. Speed Boss
b. Gang Boss
c. Inspector
d. Repair Boss
57. Increased competition in the market will ________.
a. Increase the cost of production
b. Increase the tax
c. Reduce the profit margin
d. Increase the profit
58. The most important element of ________ is face of face interaction.
a. personal selling
b. advertising
c. sales promotion
d. public relations
59. Which of the following is not a feature of divisional structure?
a. It is easy to fix the responsibility on one department.
b. It is not suitable for large firms.

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c. It facilitates managerial development.

d. Its formation is based on product lines.
60. Customer is the ________ of the market.
a. King
b. Sympathiser
c. Servant
d. Seller

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Class 12 - Business Studies

Sample Paper 02

Solution

Section A
1. (a) Management
Explanation: Management is the process of getting things done by others.
2. (d) Division of work
Explanation: This company follows the principle of division of work.
3. (d) only iv
Explanation: Identifying opportunity and getting a first-mover advantage is quoted in this example.
4. (d) Present and Future position
Explanation: Under the planning process, we set objectives and decide in advance the appropriate
course of action for the future. Thus planning bridges gap between present and future position.
5. (a) Divisional Organisation
Explanation: Divisional Organisation helps in fixation of responsibility.
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complete study material for CBSE, NCERT, JEE (main), NEET-UG and NDA exams.
6. (b) (i) - (d), (ii) - (c), (iii) - (a), (iv) - (b)
Explanation: (i) - (d), (ii) - (c), (iii) - (a), (iv) - (b)
7. (a) Systematised body of knowledge
Explanation: Management as science is systematised body of knowledge.
8. (a) One Head One Plan
Explanation: Unity of direction is concerned with one head one plan because:
All the units of an organisation should be moving towards the same objectives through
coordinated and focussed efforts.
Each group of activities having the same objective must have one head and one plan.
This ensures the unity of action and coordination.
For example, if a company is manufacturing motorcycles as well as cars then it should have
two separate divisions for both of them. Each division should have its own incharge, plans and
execution resources.
9. (c) Technological Environment
Explanation: The technological environment includes changes relating to scientific improvement,
method of production, use of new equipment and machinery to improve the quality of products, etc.
Thus it is an example of a technological environment.
10. (c) top management
Explanation: top management
11. (d) Decentralisation
Explanation: Under decentralisation, the authority is systematically divided at every level of
management. The management is entrusted with the operational authority to take decisions on jobs
assigned to them.
12. (c) Production concept
Explanation: Under production concept of marketing efforts are made to bring down the cost of
production to the minimum?
13. (d) Organisation faces heavy loss
Explanation: When the management of an organisation gets weakened then the organisation

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will face heavy loss.

14. (c) Flexible
Explanation: Management principles are Flexible.
15. (d) ecomonic, social
Explanation: The population is a component of the total economic environment, while the
composition of the population is a component of the social environment.
16. (c) Planning reduces creativity
Explanation: Planning is an intellectual process. The planners make a prediction for the future by
using their expertise, innovative ideas, and creativity. Thus planning promotes creativity.
17. (d) Number of subordinates under a superior
Explanation: The span of management means how many subordinates can be effectively managed by
a manager. It depends upon the capacity and intelligence level of the manager and subordinates, trust
in subordinates, and nature of the job.
18. (a) sampling
Explanation: sampling
19. (b) Group
Explanation: Management is a group activity because an organisation is a collection of diverse
individuals with different needs. Every member of the group has a different purpose for joining the
organisation but as members of the organisation, they work towards fulfilling the common
organisational goal.
20. (a) Material
Explanation: Material order
21. (a) Globalisation
Explanation: Globalisation
22. (b) Program
Explanation: Swatch Bharat Abhiyan is an example of a program.
23. (d) Authority
Explanation: Authority is key to managerial posts.
24. (b) only ii
Explanation: The product concept focuses on the quality and performance of a product produced.
Section B
25. (c) Both art and science
Explanation: Management is both art and science because as a science there are several reasons: it has
universally accepted principles, it has a cause and effect relationship, etc, and as an art, it requires
perfection through practice, practical knowledge, etc.
26. (d) 14
Explanation: Henri Fayol propounded 14 Principles of Management which are:
i. Division of work
ii. Authority and Responsibility
iii. Discipline
iv. Unity of command
v. Unity of direction
vi. Subordination of Individual Interest to General Interest
vii. Remuneration of Employees
viii. Centralisation and Decentralisation
ix. Scalar chain
x. Order

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xi. Equity
xii. Stability of Personnel
xiii. Initiative
xiv. Espirit de corps
27. (d) Legal environment
Explanation: The legal environment is concerned with all law and legal affairs.
28. (d) All of these
Explanation: All of these is correct.
29. (b) Informal
Explanation: Informal organisation resists changes.
30. (b) Place Mix
Explanation: Place Mix Element.
31. (d) Organizational objective
Explanation: Organizational objective of management.
32. (c) Profit
Explanation: Profit study
33. (b) Foreign Trade
Explanation: Trade Policy brings under control the foreign trade.
34. (a) Personal Selling
Explanation: Personal selling promotional technique can offer expert opinion to the consumers.
35. (d) Social objective
Explanation: Social objective of management.
36. (c) Product concept
Explanation: Product concept
37. (c) All of these
Explanation: All of these are examples of sales promotion technique.
38. (a) Divisional organisation
Explanation: Divisional organisation based on divisions.
39. (d) only ii
Explanation: Sales promotion works on increasing demand by informing the target market.
40. (d) F W Taylor
Explanation: F W Taylor is known as the father of scientific management.
41. (c) Political Uncertainty
Explanation: Political environment includes political conditions such as general stability and peace in
the country and specific attitudes with the elected govt hold towards business. Political instability will
shake the confidence of business people.
42. (a) Identification and division of work
Explanation: Identification and division of work
43. (b) To carry low stock
Explanation: To carry low stock
44. (d) avoiding confusions and duplications
Explanation: Organisation avoid confusions and duplications
45. (d) Product Concept
Explanation: Product Concept deals with the quality and performance of the product.
46. (d) Divisional Structure
Explanation: Divisional structure is formed on the basis of the product. It is suitable for
those organisations which are large in size and are producing multi-products. It provides more

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autonomy of actions.
47. (b) Sales Promotion
Explanation: Examples include contests, coupons, freebies, loss leaders, point of purchase displays,
premiums, prizes, product samples, and rebates. Sales promotions can be directed at either the
customer, sales & staff or distribution channel members (such as retailers).
48. (d) A is false but R is true.
Explanation: The span of management means how many employees can be effectively managed by
one manager.
Section C
49. (b) Planning involves huge cost
Explanation: Planning involves huge cost
50. (b) It may not work in a dynamic environment
Explanation: It may not work in a dynamic environment
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51. (c) It is futuristic
Explanation: It is futuristic
52. (d) It leads to rigidity
Explanation: It leads to rigidity
53. (c) Implementing the plan
Explanation: Implementing the plan
54. (d) Planning doesn't guarantee success.
Explanation: Planning doesn't guarantee success.
55. (a) Management
Explanation: Management has no representative professional organization.
56. (b) Gang Boss
Explanation:
i. Speed boss - Responsible for timely and accurate completion of the job.
ii. Gang boss - Responsible for keeping machine and tools ready for operation.
iii. Repair boss - To Ensure proper working condition of machines.
iv. Inspector - To Check the quality of work.
57. (c) Reduce the profit margin
Explanation: Increased competition may lead to efficiency and effectiveness in utilisation of resources.
As well as it compelled the manufacturers to reduce their margin of profit. So that they can stay in the
competition for a long period.
58. (a) personal selling
Explanation: personal selling
59. (b) It is not suitable for large firms.
Explanation: It is not suitable for large firms.
60. (a) King
Explanation: The main focus of the market is the customer.

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