Students of class 12 Business Studies should refer to MCQ Questions Class 12 Business Studies Business Environment with answers provided here which is an important chapter in Class 12 Business Studies NCERT textbook. These MCQ for Class 12 Business Studies with Answers have been prepared based on the latest CBSE and NCERT syllabus and examination guidelines for Class 12 Business Studies. The following MCQs can help you to practice and get better marks in the upcoming class 12 Business Studies examination

Chapter 3 Business Environment MCQ with Answers Class 12 Business Studies

MCQ Questions Class 12 Business Studies Business Environment provided below have been prepared by expert teachers of grade 12. These objective questions with solutions are expected to come in the upcoming Standard 12 examinations. Learn the below provided MCQ questions to get better marks in examinations.

Question. India’s population is expected to grow under 0.5 per cent during 2031-41 due to decline in fertility rate and increase in life expectancy. These changes in India’s demography will also have implications such as the proportion of elementary school-going children will witness significant declines, lack of hospital beds and increase in retirement age. The related feature of business environment being described in the above lines is:
(a) Totality of external forces
(b) Dynamic nature
(c) Interrelatedness
(d) Relativity

Question. Which of the following is not the component of Specific Forces of business environment ?
(a) Technology
(b) Customers
(c) Investors
(d) Employees

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 likerising health consciousness, changing lifestyles, increase in disposable income and growing availability of organic food products in shopping malls, retail outlets 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

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 the above

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

Question. India continues to be a lower-middle-income country along with 46 others, while Sri Lanka has climbed to the upper-middle-income group for the fiscal year (FY) 2020, according to the World Bank’s classification of countries by income levels, released on July 1, 2019. Identify the related dimensions of business environment.
(a) Social dimension
(b) Technological dimension
(c) Economic dimension
(d) Political dimension

Question. Even though the political conditions vary from country to country, they impact the sentiment of an investor in the business, if the instability of the political conditions cause uncertainty and make it difficult for him to predict the future. Which feature of the business environment is being highlighted in the above statement?
(a) Specific and general forces
(b) Dynamic nature
(c) Relativity
(d) All of these

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

Question. Which of the following is not an element of social environment?
(a) Birth and death rate
(b) Constitution of the country
(c) Population Shifts
(d) Life expectancy

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

Question. The Economic Survey, 2019 suggests that the psychological biases can be used for the tax compliance. It is in favour of using religious slogan such as “dying in debt is a sin” to improve tax compliance. Identify the related dimensions of business environment.
(a) Legal dimension and social dimension
(b) Social dimension and economic dimension
(c) Technological dimension and political dimension
(d) Political dimension and economic dimension

Question. “The increase in the demand for many Ayurvedic medicines, Health products and services in the past few months, is related to the need for building immunity and an increased awareness for health care due to the spread of Corona Virus.” Identify the feature of business environment being described above.
(a) Specific and general forces
(b) Inter-relatedness
(c) Relativity
(d) None of these

Question. Since more number of people have become more beauty and health conscious, our economy has witnessed an unprecedented surge in the number of health and beauty spas and wellness clinics. Related feature of business environment being described in the above lines is:
(a) Totality of external forces
(b) Dynamic nature
(c) Interrelatedness
(d) Relativity

Question. Which of the following does not characterize the business environment?
(a) Uncertainty
(b) Employees
(c) Complexity
(d) Relativity

Question. The Jharkhand government has developed surveillance network using latest satellite technology. Under this system, the state’s mining department would be in a position to check illegal mining activities across the state. The state government is also considering the use of drones in its proposed campaign against illegal mining. Identify the related dimensions of business environment.
(a) Economic dimension and legal dimension
(b) Social dimension and economic dimension
(c) Technological dimension and political dimension
(d) Political dimension and economic dimension

Question. Which of the following is not the component of Specific Forces of business environment ?
(a) Technology
(b) Customers
(c) Investors
(d) Employees

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

Question. Electric vehicles with zero emission are emerging as a good alternative to ‘problems like climate change, surging pollution, crude import bill and energy security. Identify the related dimensions of business environment.
(a) Economic dimension, legal dimension and social dimension
(b) Social dimension, political dimension and economic dimension
(c) Economic dimension, technological dimension and social dimension
(d) Social dimension, political dimension and legal dimension

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.

Question. The Prime Minister has given a relief package of ` 5 crore. This is related to which dimension of business environment
(a) Political environment
(b) Economic environment
(c) Legal environment
(d) None of these

Question. Delhi sports is a sports equipment company. It has different branches in different parts of the world. However, the requirements of the sports equipment’s are different in different branches. This is due to the change in cultures and lifestyles of people in the different countries. Company knows that the demand for these products is unpredictable as new designs keep on coming and the industry keeps on changing frequently. Identify the features of business environment highlighted here:
(a) Relativity
(b) Uncertainty
(c) Dynamic nature
(d) Complexity

Question. Arora limited is a large firm which sells mobile phones. The company has decided to make it adaptable to all different changes like social, economic, political, etc. with continuously changing circumstances. Identify the features of business environment highlighted here.
(a) Relativity
(b) Uncertainty
(c) Dynamic nature
(d) Complexity

Question. “Business environment includes which of the following forces?
(a) Socio-cultural
(b) Political
(c) Legal
(d) All of these

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

Question. Arora limited is a large firm which sells mobile phones. The company has decided to make itself adaptable to all different changes like social, economic, political etc. with continuously changing circumstances. Identify the features of business environment highlighted here :
(a) Relative concept
(b) Uncertainty
(c) Dynamic nature
(d) Complexity

Question. Anju works in a law firm. She observed that numerous interrelated and dynamic conditions or forces arise from different sources. Identify the features of business environment highlighted here.
(a) Relativity
(b) Uncertainty
(c) Dynamic nature
(d) Interrelatedness

Question. ‘Yochina’ began its business by offering the classic combo of noodles and fries. But over time, their customers wanted healthier foods, so ‘Yochina’ responded and began offering healthy alternatives such as salads, fruits, wraps and oatmeal. If ‘Yo china’ 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. Identify it.
(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.

Question. In urban areas people are becoming diet conscious. They go to gym and avoid eating junk food. Due to which there is less sale of fast food chain stores. Identify the dimension of business environment.
(a) Political
(b) Economic
(c) Social
(d) None of these

Question. According to a report by the India Staffing Federation(ISF), India has emerged as the fifth largest market worldwide in flexi-staffing in 2018 and the country would have 6.1 million flexi-workforce by 2021. It showed that Haryana, Gujarat, Karnataka, MadhyaPradesh and Telangana are the states with high growth potential for flexi- staffing but Andhra Pradesh tops thelist of states with favourable business environment. Identify the feature of business environment being discussed above,
(a) Relativity
(b) Dynamic nature
(c) Uncertainty
(d) Interrelatedness

Question. Which of the following is an example of social environment?
(a) Money supply in the economy
(b) Consumer Protection Act
(c) The constitution of the country
(d) Composition of family

Question. 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 the two dimensions of business environment discussed in the above case.
(a) Economic and political environment
(b) Social and political environment
(c) Social and technological environment
(d) Legal and political environment

Question. Identify the dimension of business environment, which focuses on laws and regulations on industrial development.
(a) Economic environment
(b) Legal environment
(c) Political environment
(d) All of these

Question. “Even after opening up of the Indian economy in 1991 foreign companies found it extremely difficult to cut through the bureaucratic red tape to get permits for doing business in India, which created a negative impact on business.”
(a) Social environment
(b) Technological environment
(c) Political environment
(d) Legal environment

Question. Which of the following does not characterize the business environment?
(a) Uncertainty
(b) Employees
(c) Complexity
(d) Relativity

Question. Which among the following is a part of micro environment?
(a) Customers
(b) Competitors
(c) Suppliers
(d) All of the above

Question. Which of the following is not a part of the business environment of business?
(a) Customers
(b) Suppliers
(c) Competitors
(d) None of the above

Question. Identify the dimension of business environment, which focuses on laws and regulations on industrial development.
(a) Political environment
(b) Economic environment
(c) Legal environment
(d) All of these

Question. According to the United Nations Environmental Agency, the world produces around 300 million tons of plastic each year, half of which constitutes singleuse items. Ford is recycling over one billion plastic bottles every year to develop elements of the car’s interior, reducing the amount of plastic ending up in a landfill. The American car maker has revealed that their Romanian-built EcoSport SUVs’ carpets are made using 470 recycled single-use plastic bottles. The process for making Ford EcoSport carpets involves shredding bottles and their caps into tiny flakes and then heating them to 260°C. Identify the related dimension of business environment.
(a) Economic dimension
(b) Social dimension
(c) Technological dimension
(d) Political dimension

Question. In order to boost and double India’s export of goods and services to over USD 1,000 billion by 2025, it is important to lower effective corporate tax rate, bring down cost of capital and simplify regulatory and tax framework. Identify the related dimension of business environment.
(a) Social dimension and legal dimension
(b) Technological dimension and political dimension
(c) Political dimension and social dimension
(d) Economic dimension and legal dimension

Question. DigiLocker is the country’s first secured cloud-based platform for the storage, issuance and verification of documents with the Driving Licence & Vehicle Registration System of the Road Transport Ministry. The integration of a government department with DigiLocker since its launch last year is one of the biggest of its kind. It will spare 1 people the trouble of carrying licences & vehicle papers, which can be accessed on phones using the DigiLocker app. Identify the related dimension of business environment.
(a) Economic dimension
(b) Technological dimension
(c) Social dimension
(d) Political dimension

Question. The growing awareness about healthcare has led to an increase in the demand for healthcare products and services in the country. Identify the feature of business environment being escribed in the above case.
(a) Dynamic nature
(b) Uncertainty
(c) Relativity
(d) Interrelatedness

Question. As a result of major government initiatives, more and more people are going ‘green’. In order to keep in line with the trend, ‘Rose carpet’ a carpet cleaning company has advertised that they only use natural cleaners that come from renewable resources and that all their service vehicles are hybrid vehicles that use both gas and electricity. Identify one of the points related to the importance of business environment and its understanding by managers which is being highlighted in the above case.
(a) It helps in assisting in planning and policy formulation.
(b) It helps in coping with rapid changes.
(c) It helps in improving performance.
(d) It enables the firm to identify opportunities and getting the first mover advantage.

Question. Which of the following is not a component of specific forces of business environment?
(a) Technological conditions
(b) Customers
(c) Employees
(d) Investors

Question. According to the a health survey, 39% of adults are overweight. Over the last 40 years, the prevalence of obesity has tripled around the world. With over half of consumers drinking at least one sugary drink on a given day, regulations towards the beverage sector are likely to become increasingly strict. In Germany, for example, a sugar tax was introduced in 2018 on beverages containing more than 5% sugar. Identify the related dimensions of business environment.
(a) Legal dimension and social dimension
(b) Social dimension and technological dimension
(c) Technological dimension and legal dimension
(d) Political dimension and technological dimension

Question. Which of the following is an example of social environment?
(a) Money supply in the economy
(b) Consumer Protection Act
(c) The constitution of the country
(d) Composition of family

Question. Naveen started a saree showroom in Mumbai, India. He wants to sell sarees in France but he understands that conditions are different in different countries. Identify the features of business environment highlighted here.
(a) Relativity
(b) Uncertainty
(c) Dynamic nature
(d) Complexity

Question. ‘Sohan village’ 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 ‘Sohan village’ adversely.
(a) Totality of external forces
(b) Dynamic nature
(c) Interrelatedness
(d) Uncertainty

Question. Any kind of external devices, like compact discs (CD’s) for computer, have become obsolete. Google, with its Google Drive service, Apple with its iCloud offering, enables the users store documents, photos, music and movies on web-based servers. Identify the feature of business environment being described in the above lines.
(a) Relativity
(b) Dynamic nature
(c) Uncertainty
(d) Interrelatedness

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

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 these

We hope the above multiple choice questions for Class 12 Business Studies for Chapter 3 Business Environment provided above with answers based on the latest syllabus and examination guidelines issued by CBSE, NCERT and KVS are really useful for you. Business Environment is an important chapter in Class 12 as it provides very strong understanding about this topic. Students should go through the answers provided for the MCQs after they have themselves solved the questions. All MCQs have been provided with four options for the students to solve. These questions are really useful for benefit of class 12 students. Please go through these and let us know if you have any feedback in the comments section.