AmbifulWorksheets
Practice that never repeats
CBSE · Class 12 · Business Studies

Business Environment

Standard difficulty · 20 questions · 40 marks · Time: 40 minutes

Name: Date: Score: ____ / 40

Show your working for Sections B and C. Answers are on the last page — try every question first!

Section A — Choose the correct answer8 × 1 = 8 marks
1.
The total of all individuals, institutions and forces outside a business that affect it is the:
  1. business plan
  2. management
  3. business organisation
  4. business environment
2.
What is meant by “first mover advantage”?
  1. the gain from being first to use an opportunity
  2. new methods, inventions and techniques
  3. laws, rules and court orders
  4. interest rates, inflation, incomes and the like
3.
Which of these is a change in the social environment?
  1. Rules require warnings on packets of harmful products.
  2. Prices of most goods rise faster than usual.
  3. Incomes of families rise, so they spend more.
  4. People become more health-conscious and want organic food.
4.
The environment includes all forces outside the business taken together. Which feature of business environment does this show?
  1. totality of external forces
  2. relativity
  3. inter-relatedness
  4. uncertainty
5.
A firm keeps up with fast changes in customer tastes and technology. Which importance of understanding the business environment does this show?
  1. tapping useful resources
  2. assisting in planning and policy formulation
  3. coping with rapid changes
  4. identifying opportunities
6.
Which of these is a general force of the business environment?
  1. Investors
  2. Suppliers
  3. Competitors
  4. Laws and court orders
7.
How does “tapping useful resources” help a business?
  1. helps get inputs from the environment
  2. shows what plans can work
  3. firms that watch the environment do better
  4. gives a first mover advantage
8.
What does the “specific and general forces” of business environment mean?
  1. some forces act directly on a firm, others on all firms
  2. it keeps changing
  3. its forces are closely linked and affect each other
  4. its many forces are hard to understand together
Section B — Short answer8 × 2 = 16 marks
9.
What is meant by business environment?
10.
Explain each term: (a) social environment (b) technological environment
11.
Which dimension of the business environment does each change belong to? (a) Electric scooters reduce demand for petrol scooters. (b) Rules require warnings on packets of harmful products.
12.
Which feature of business environment does each show? (a) Fashions in clothing keep changing every season. (b) Customers and competitors affect the firm directly; incomes and laws affect it indirectly.
13.
How does understanding the environment help in each case? (a) A firm sees falling demand for its product early and plans a new one. (b) Knowing the environment helps managers decide future plans and policies.
14.
Is each a specific or a general force? (a) Competitors. (b) New technology.
15.
How might each change affect a business? Name its dimension. (a) Banks raise their rates of interest on loans. (b) Electric scooters reduce demand for petrol scooters.
16.
Explain the feature of business environment shown in each: (a) The environment includes all forces outside the business taken together. (b) Customer tastes and technology keep shifting all the time.
Section C — Word problems4 × 4 = 16 marks
17.
Explain the features of business environment.
18.
Match each with its meaning: (a) social environment (b) technological environment (c) specific forces. Choose from: customs, values, traditions and lifestyles; new methods, inventions and techniques; forces like customers and competitors that directly affect a firm.
19.
Read about Shubh Footwear Ltd. (a) Digital payments replace cash in many shops. (b) A court orders a factory to stop releasing waste into a river. (c) More women take up jobs, raising demand for ready meals. Identify the dimension of business environment in each part and explain it briefly.
20.
Read about Sunrise Foods Ltd. (a) A firm notices a foreign rival entering the market and improves its product in time. (b) A firm keeps up with fast changes in customer tastes and technology. (c) A firm studies the market to arrange finance and materials on good terms. Identify the importance of business environment in each part and explain it briefly.
AmbifulWorksheets
Practice that never repeats
CBSE · Class 12 · Business Studies

Answer key

Business Environment · AW-12BS-BEN-2026-V1 · For parents — fold back or tear off before handing the sheet to your child.

QAnswerWorking
1(d) business environment—
2(a) the gain from being first to use an opportunity—
3(d) People become more health-conscious and want organic food.—
4(a) totality of external forces—
5(c) coping with rapid changes—
6(d) Laws and court orders—
7(a) helps get inputs from the environment—
8(a) some forces act directly on a firm, others on all firms—
9The sum total of all individuals, institutions and other forces outside a business that may affect its performance.—
10(a) customs, values, traditions and lifestyles (b) new methods, inventions and techniques—
11(a) technological (b) legal—
12(a) dynamic nature (b) specific and general forces—
13(a) identifying threats: gives early warning signals (b) assisting in planning and policy formulation: shows what plans can work—
14(a) specific (b) general—
15(a) economic: it changes costs, demand or the cost of borrowing (b) technological: it brings new products and methods and makes old ones obsolete—
16(a) totality of external forces (b) dynamic nature—
17Totality of external forces, specific and general forces, inter-relatedness, dynamic nature, uncertainty, complexity and relativity.—
18(a) customs, values, traditions and lifestyles (b) new methods, inventions and techniques (c) forces like customers and competitors that directly affect a firm—
19(a) technological: it brings new products and methods and makes old ones obsolete (b) legal: the firm must change its practices to obey the law (c) social: it changes what people want to buy—
20(a) identifying threats: gives early warning signals (b) coping with rapid changes: helps the firm adapt in time (c) tapping useful resources: helps get inputs from the environment—