Business studies

CHAPTER 3
Business environment
Multiple choice questions
Q1. The nature of the relationship of our country with foreign countries", is a major element
of which of the following components of the Business Environment?
(a) Social Environment (c) Environment
(b) Legal Environment (d) Economic Environment
Q2. As part of regulations to be followed by advertisers, the advertisement for a new brand
of baby food for infants provides important information for potential buyers that it is "Not
recommended for infants under the age of four months. Which dimension of the business
environment is highlighted in the above statement?
(a) Social Environment (c) Political Environment
(b) Legal Environment (d) Economic Environment
Q3. The sum total of all individuals, institutions and other forces that are outside the control
of a business enterprise but that may affect its performance is known as
(a) Business environment (c) Political environment
(b) Social environment (d) Economic environment
Q4. Change in taxes is part of
(a) Economic Environment (c) Legal Environment
(b) Political Environment (d) Social Environment
Q5. Demonetisation had direct impact on
(a) Social Environment
(b) Political Environment
(c) Economic Environment
(d) None of the above
Q6. The environment scanning helps to identify
(a) Opportunities (c) Both (a) and (b)
(b) Threats (d) None of the above
Q7. Business environment includes
(a) Surroundings of Business.
(b) Forces Factors, Institutions which directly or indirectly affect business
(c) Customers and Employees.
(d) None of the above
Q8. India has launched its most advanced Geo-imaging satellite which will allow better
monitoring of the subcontinent, including its borders with neighbouring countries, by
imaging the country 4-5 times a day, the satellite is capable of near real time monitoring of
floods and cyclones. The factor constituting the Business Environment being discussed
above is:
(a) Social environment (c) Technological environment
(b) Economic environment (d) Political environment
Q9. _________feature of business environment states that various factors of business
environment affect each other.
(a) Pervasive
(b) Continuous
(C) dynamic
(d) Interrelatedness
Q10. Introduction of mobile phones have negatively effected the business of cameras and
watches it is related to
(a) Social Environment
(b) Economic Environment
(c) Technological Environment
(d) Political Environment

Short / statement-based answer type questions

Q11. What do you mean by business environment?
Q12. Define ‘environment scanning'.
Q13. "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."
Which feature of business environment is highlighted by this point?
Q14. "Business environment is dynamic." Comment by mentioning examples.
Q15. "A good understanding of environment by business managers enables them not only
to identify and evaluate but also to react to the forces external to their firm."
In the light of the above statement explain any four points of importance business
environment by a manager.
Q16. "Understanding of business environment gets a first mover advantage." Discuss.

Long / Case-based answer type questions

Q17. 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 and due to some unethical contents related to their religion were shown in that
movie. The other movie was released on time and made huge profit as there was no
competition and movie which was postponed suffered loss.
(i) Which feature of business environment is highlighted here?
(ii) Identify the dimension of business environment, which delayed the release of movie.
Q18. 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 organized by Directorate of Education. He was awarded
first prize for his invention.
Identify and explain the dimensions of business environment discussed in the above case.
Q19. Explain, with examples and flow chart, the various dimensions of business
environment.
Q20. What is included in 'Legal Environment' of Business? State and explain.