Class 12 Business Studies: CBSE Sample Question Papers- Term I (2021-22)- 4 Notes | Study Sample Papers for Class 12 Commerce - Class 12

Class 12: Class 12 Business Studies: CBSE Sample Question Papers- Term I (2021-22)- 4 Notes | Study Sample Papers for Class 12 Commerce - Class 12

The document Class 12 Business Studies: CBSE Sample Question Papers- Term I (2021-22)- 4 Notes | Study Sample Papers for Class 12 Commerce - Class 12 is a part of the Class 12 Course Sample Papers for Class 12 Commerce.
All you need of Class 12 at this link: Class 12


Class-XII
Time: 90
Max. Marks: 40

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

Q.1: “What distinguishes a successful manager from a less successful one is the ability to put the principles into practice.” Which aspect of the nature of management is highlighted in the above statement? 
(a) Management as a science 
(b) Management as an art 
(c) Management as a profession 
(d) Management is an intangible force. 

Correct Answer is Option (b)
Art involves the creative practice of existing theoretical knowledge. A successful manager practices the art of management in the day-to-day job of managing an enterprise based on study, observation and experience.


Q.2: _______ provides a rational approach for setting objectives and developing appropriate courses of action for achieving predetermined objectives. 
(a) Directing 
(b) Staffing 
(c) Planning 
(d) Controlling 

Correct Answer is Option (c)
Planning involves setting objectives and developing appropriate courses of action to achieve these objectives. Objectives provide direction for all managerial decisions and actions. Planning provides a rational approach for achieving predetermined objectives. All members, therefore, need to work towards achieving organisational goals.


Q.3: Marketing mix is the set of _______ that the firm uses to pursue its marketing objectives in the target market.
(a) Production tools
(b) Promotional tools 
(c) Marketing tools
(d) Selling tools 

Correct Answer is Option (c)
From a number of alternatives available a firm chooses a particular combination to develop a market offering. The combination of variables chosen by a firm to prepare its market offering is also called marketing mix. Thus, marketing mix is described as the set of marketing tools that a firm uses to pursue its marketing objectives in a target market.


Q.4: Which level of management is responsible for the welfare and survival of the organisation? 
(a) Top level of management 
(b) Middle level of management 
(c) Supervisory level 
(d) Both (b) and (c) 

Correct Answer is Option (a)
The major task of top management is to integrate diverse elements and coordinate the activities of different departments according to the overall objectives of the organisation. These top level managers are responsible for the welfare and survival of the organisation. They analyse the business environment and its implications for the survival of the firm.


Q.5: Name the principle of management given by Fayol which when applied would mean that the workers and management both honour their commitments without any prejudice towards one another. 
(a) Discipline 
(b) Mental Revolution 
(c) Remuneration of employees
(d) Scalar chain 

Correct Answer is Option (a)
Discipline is the obedience to organisational rules and employment agreement which are necessary for the smooth functioning of the organisation. According to Fayol, discipline requires good superiors at all levels, clear and fair agreements and judicious application of penalties.


Q.6: A brand or part of the brand that is given legal protection is called _______
(a) Brand Mark 
(b) Trademark 
(c) Brand 
(d) Brand name 

Correct Answer is Option (b)
A brand or part of a brand that is given legal protection is called trademark. The protection is given against its use by other firms. Thus the firm, which got its brand registered, gets the exclusive right for its use. In that case, no other firm can use such name or mark in the country.


Q.7: Identify the dimension of the characteristic of management- “it is multidimensional”, which specifies that the task of management is to make the strengths of human resources effective and their weaknesses irrelevant towards achieving the organisation’s objectives.
(a) Management of work 
(b) Management of people 
(c) Management of operations 
(d) Management of goals 

Correct Answer is Option (b)
Human resources or people are the organisation’s greatest asset. Despite all developments in technology “getting work done through people” is still a major task for the manager. The task of management is to make people work towards achieving the organisational goals, by making their strengths effective and their weaknesses irrelevant.


Q.8: _______ involves a variety of programmes designed to promote and protect a company’s image and its individual products in the eyes of the public. 
(a) Advertising 
(b) Personal selling 
(c) Publicity 
(d) Public relations 

Correct Answer is Option (b)
The business needs to communicate effectively to customers, suppliers, and dealers, since they are instrumental in increasing the sales and profit. Besides those who come into direct contact with the organisation or its products, there are other members of the general public whose voice or opinion is equally important. This public may be interested in the company and its product and have an impact on the business ability to achieve its objectives. Thus, it becomes imperative to manage public opinion and the company’s relation with the public on a regular basis. Therefore, public relations involve a variety of programmes designed to promote or protect a company’s image and its individual products in the eyes of the public.


Q.9: Which type of organisational structure will you suggest for a firm which has diversified activities and operations requiring a high degree of specialisation?
(a) Centralised structure 
(b) Decentralised Structure 
(c) Divisional structure 
(d) Functional structure 

Correct Answer is Option (d)
Grouping of jobs of similar nature under functional and organising these major functions as separate departments creates a functional structure. All departments report to a coordinating head. It is most suitable when the size of the organisation is large, has a diversified activities and operations require a high degree of specialisation.


Q.10: “Changes or events cannot be eliminated but they can be anticipated and managerial responses to them can be developed.” is suggested by the following importance of planning: 
(a) Planning facilitates decision making 
(b) Planning promotes innovative ideas 
(c) Planning provides direction 
(d) Planning reduces the risks of uncertainty. 

Correct Answer is Option (d)
Planning is an activity which enables a manager to look ahead and anticipate changes. By deciding in advance the tasks to be performed, planning shows the way to deal with changes and uncertain events. Changes or events cannot be eliminated but they can be anticipated and managerial responses to them can be developed.


Q.11: “Grouping similar nature jobs into larger units called departments” is the step in the process of one of the functions of management. Identify the function of management. 
(a) Planning 
(b) Organising 
(c) Directing 
(d) Staffing 

Correct Answer is Option (b)
Once work has been divided into small and manageable activities then those activities which are similar in nature are grouped together. Such sets facilitate specialisation. This grouping process is called departmentalisation. Departments can be created using several criteria as a basis.


Q.12: The Statement “Planning is a primary function”, suggests that…… 
(a) Planning precedes other functions 
(b) Planning requires logical and systematic thinking 
(c) Plan is framed, it is implemented, and is followed by another plan, and so on 
(d) Planning is required at all levels of management as well as in all departments of the organisation.

Correct Answer is Option (a)
Planning lays down the base for other functions of management. All other managerial functions are performed within the framework of the plans drawn. Thus, planning precedes other functions. This is also referred to as the primacy of planning. The various functions of management are interrelated and equally important. However, planning provides the basis of all other functions.


Q.13: A major decision area under one of the functions of marketing is the decision regarding marketing intermediaries to be used. Name the function. 
(a) Physical Distribution 
(b) Gathering and analysing market information 
(c) Promotion 
(d) Transportation

Correct Answer is Option (a)
Managing physical distribution is another very important function in the marketing of goods and services. The two major decision areas under this function include (a) decision regarding channels of distribution or the marketing intermediaries (like wholesalers, retailers) to be used and (b) physical movement of the product from where it is produced to a place where it is required by the customers for their consumption or use.


Q.14: “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
(b) Legal Environment 
(c) Political Environment
(d) Economic Environment 

Correct Answer is Option (c)
Political environment includes political conditions such as general stability and peace in the country and specific attitudes that elected government representatives hold towards business. The significance of political conditions in business success lies in the predictability of business activities under stable political conditions.


Q.15: Which of the following statements is incorrect?
(a) Marketing is a social process 
(b) Focus of the marketing activities is on customer needs 
(c) Marketing is merely a post production activity. 
(d) Marketing mix is a wider term than product mix. 

Correct Answer is Option (c)
Marketing is not merely a post-production activity. It includes many activities that are performed even before goods are actually produced, and continue even after the goods have been sold. For example, activities such as identification of customer needs, collection of information for developing the product, designing suitable product package and giving it a brand name are performed before commencement of the actual production. Similarly, many follow up activities are required for maintaining good customer relations for procuring repeat sale.


Q.16: Planning is closely connected with _____  and _______
(a) Responsibility and accountability 
(b) Delegation and decentralization 
(c) Stability and security 
(d) Creativity and innovation

Correct Answer is Option (d)
Planning is deciding in advance what to do and how to do. It is one of the basic managerial functions. Before doing something, the manager must formulate an idea of how to work on a particular task. Thus, planning is closely connected with creativity and innovation. But the manager would first have to set objectives, only then a manager will know where he has to go.


Q.17: ________ is an important function of marketing which is important not only for protection of the product but also serves as a promotional tool. 
(a) Grading 
(b) Labeling 
(c) Packaging 
(d) Branding 

Correct Answer is Option (c)
Packaging protects the contents of a product from spoilage, breakage, leakage, pilferage, damage, climatic effect, etc. This kind of protection is required during storing, distribution and transportation of the product. Packaging is also used for promotion purposes. A startling colour scheme, photograph or typeface may be used to attract attention of the people at the point of purchase. Sometimes it may work even better than advertising. In self-service stores, this role of packaging becomes more important.


Q.18: 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 
(b) Legal Environment 
(c) Political Environment 
(d) Economic Environment 

Correct Answer is Option (b)
Legal environment includes various legislations passed by the Government administrative orders issued by government authorities, court judgments as well as the decisions rendered by various commissions and agencies at every level of the government— centre, state or local. Impact of legal environment  can be illustrated with the help of government regulations to protect consumer’s interests. For example, the advertisement of alcoholic beverages is prohibited. Similarly, advertisements of baby food must necessarily inform the potential buyer that mother’s milk is the best. All these regulations are required to be followed by advertisers.


Q.19: The principle of management given by Fayol which aims at preventing overlapping of activities is:
(a) Division of work
(b) Unity of Command 
(c) Unity of Direction
(d) Order 

Correct Answer is Option (c)
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 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 in charge, plans and execution resources. If it is not done, the activities will be overlapping and there will be wastage of resources.


Q.20: _______ ensures that the subordinate performs tasks on behalf of the manager thereby reducing his workload and providing him with more time to concentrate on important matters. 
(a) Decentralization
(b) Delegation of authority 
(c) Authority
(d) Accountability 

Correct Answer is Option (b)
Delegation refers to the downward transfer of authority from a superior to a subordinate. It is a prerequisite to the efficient functioning of an organisation because it enables a manager to use his time on high priority activities. By empowering the employees, the managers are able to function more efficiently as they get more time to concentrate on important matters. Freedom from doing routine work provides them with opportunities to excel in new areas.


Q.21: _____ is a process of classification of products into different groups on the basis of some important characteristics such as quality, size, etc. 
(a) Standardization 
(b) Grading 
(c) Product Development 
(d) Selling

Correct Answer is Option (b)
Grading is the process of classification of products into different groups, on the basis of some of its important characteristics such as quality, size, etc. Grading is particularly necessary for products which are not produced as per the predetermined specifications, such as in case of agricultural products, say wheat, oranges, etc. Grading ensures that goods belong to a particular quality and helps in realising higher prices for high quality output.


Q.22: 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
(b) Social environment 
(c) Political environment 
(d) Economic environment. 

Correct Answer is Option (b)
The term ‘business environment’ means 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. Thus, the economic, social, political, technological and other forces which operate outside a business enterprise are part of its environment. So also, the individual consumers or competing enterprises as well as the governments, consumer groups, competitors, courts, media and other institutions working outside an enterprise constitute its environment. The important point is that these individuals, institutions and forces are likely to influence the performance of a business enterprise although they happen to exist outside its boundaries.


Q.23: Name the concept that refers to the number of subordinates that can be effectively managed by a superior and determines the number of levels of management in the organisation. 
(a) Organisation structure
(b) Span of management 
(c) Hierarchy of authority
(d) Delegation of Authority 

Correct Answer is Option (b)
The span of management, to a large extent gives shape to the organisational structure. Span of management refers to the number of subordinates that can be effectively managed by a superior. This determines the levels of management in the structure. A proper organisation structure is essential to ensure a smooth flow of communication and better control over the operations of a business enterprise.


Q.24: Taylor believed that there was only one best method to maximise efficiency. This method can be developed through study and analysis. Identify the principle of Scientific management being discussed above:
(a) Harmony not discord 
(b) Science not rule of thumb 
(c) Development of  each and every person to his or her greatest efficiency and prosperity 
(d) Cooperation not individualism 

Correct Answer is Option (b)
Taylor pioneered the introduction of the method of scientific inquiry into the domain of management practice. Taylor believed that there was only one best method to maximise efficiency. This method can be developed through study and analysis. The method so developed should substitute ‘Rule of Thumb’ throughout the organisation. Scientific method involved investigation of traditional methods through workstudy, unifying the best practices and developing a standard method, which would be followed throughout the organisation.  

Section - B

Q.25: Mamta’s design team developed some prints for women dresses in bright colours on silk. Although they looked very impressive, the use of silk made the product too expensive for the average customer. Praising their effort, Mamta’s suggested that they keep the silk dresses for special occasions like Diwali and Christmas and offer the cotton dresses on a regular basis.
Which function of management is highlighted in the above text?
(a) Planning
(b) Staffing
(c) Controlling
(d) Directing

Correct Answer is Option (d)
Directing involves leading, influencing and motivating employees to perform the tasks assigned to them.
This requires establishing an atmosphere that encourages employees to do their best. A good manager directs through praise and criticism in such a way that it brings out the best in the employee.


Q.26: Which of the following statement is correct with respect to management as science?
(a) Management has a systematised body of knowledge. 
(b) The principles of management have evolved over a period of time based on repeated experimentation and observation. 
(c) Management principles have universal validity and application. 
(d) All of the above

Correct Answer is Option (d)
Management has a systematised body of knowledge. It has its own theory and principles that have developed over a period of time. The principles of management have evolved over a period of time based on repeated experimentation and observation in different types of organisations. Since the principles of management are not as exact as the principles of science, their application and use are not universal. They have to be modified according to a given situation.


Q.27: “Dominos, the fast food giant, made major changes in its menu to be able to survive in the Indian market”. Which characteristic of management is highlighted here?
(a) Management is a group activity. 
(b) Management is a dynamic function. 
(c) Management is a continuous process. 
(d) None of these

Correct Answer is Option (b)
Management is a dynamic function and has to adapt itself to the changing environment. An organisation interacts with its external environment which consists of various social, economic and political factors. In order to be successful, an organisation must change itself and its goals according to the needs of the environment.


Q.28: Saima is one of the most successful managers of her company, Globus Ltd. She knows that a good company should have an employee suggestion system whereby initiative/ suggestions which result in substantial cost/time reduction should be rewarded. Identify the principle of management highlighted in the above description.
(a) Stability of Personnel 
(b) Equity 
(c) Order 
(d) Initiative

Correct Answer is Option (d)
Workers should be encouraged to develop and carry out their plans for improvements according to Fayol. Initiative means taking the first step with self-motivation. It is thinking out and executing the plan. It is one of the traits of an intelligent person. Initiative should be encouraged. But it does not mean going against the established practices of the company for the sake of being different.


Q.29: “Maruti Udyog became the leader in the small car market because it was the first to recognise the need for small cars in an environment of rising petroleum prices and a large middle-class population in India.” Identify the significance of business environment mentioned in the above text.
(a) Business Environment helps the firm to identify threats and early warning signals. 
(b) Business Environment enables the firm to identify opportunities and getting the first mover advantage. 
(c) Business Environment helps in tapping useful resources. 
(d) Business Environment helps in coping with rapid changes

Correct Answer is Option (b)
Opportunities refer to the positive external trends or changes that will help a firm to improve its performance. Environment provides numerous opportunities for business success. Early identification of opportunities helps an enterprise to be the first to exploit them instead of losing them to competitors.


Q.30: Planning promotes:
(a) Innovative ideas 
(b) Coordination 
(c) Directing objectives 
(d) None of these

Correct Answer is Option (a)
Since planning is the first function of management, new ideas can take the shape of concrete plans. It is the most challenging activity for the management as it guides all future actions leading to growth and prosperity of the business.


Q.31: Assertion (A): Selection of the brand name plays an important role in the success of a product.
Reason (R): Brand name helps in creating product differentiation.
(a) Both (A) and (R) are correct.
(b) (A) is correct (R) is incorrect.
(c) Both (A) and (R) are correct, and R is the correct explanation of A.
(d) Both (A) and (R) are correct, and R is not the correct explanation of A.

Correct Answer is Option (c)
Brand name helps in creating product differentiation, i.e., providing basis for distinguishing the product of a firm with that of the competitor, which in turn, helps in building customer’s loyalty and in promoting its sale. The important decision areas in respect of branding include deciding the branding strategy, say whether each product will be given a separate brand name or the same brand name will be extended to all products of the company.


Q.32: Divisional structure promotes:
(a) Flexibility 
(b) Initiative 
(c) Both (A) and (B) 
(d) None of these

Correct Answer is Option (c)
In a divisional structure, the organisation structure comprises of separate business units or divisions. Each unit has a divisional manager responsible for performance and who has authority over the unit. Generally, manpower is grouped on the basis of different products manufactured. Divisional structure promotes flexibility and initiative because each division functions as an autonomous unit which leads to faster decision making.


Q.33: For the following two statements choose the correct option:
Statement I: Planning is a time-consuming process.
Statement II: Planning is economical.
Choose the correct option from the options given below:
(a) Statement I is correct and II is wrong.
(b) Statement II is correct and I is wrong.
(c) Both the statements are correct.
(d) Both the statements are incorrect.

Correct Answer is Option (a)
Sometimes plans to be drawn up take so much of time that there is not much time left for their implementation. Planning involves huge costs. When plans are drawn up huge costs are involved in their formulation. These may be in terms of time and money for example, checking accuracy of facts may involve lot of time. Detailed plans require scientific calculations to ascertain facts and figures. The costs incurred sometimes may not justify the benefits derived from the plans.


Q.34: “Management is required not for itself but for achieving the goals of the organisation”. Which of the following importance of management is highlighted in the above line?
(a) Management increases efficiency. 
(b) Management creates a dynamic organisation. 
(c) Management helps in achieving group goals. 
(d) All of the above

Correct Answer is Option (c)
Management helps in achieving group goals. Management is required not for itself but for achieving the goals of the organisation. The task of a manager is to give a common direction to the individual effort in achieving the overall goal of the organisation.


Q.35: ______ in the definition of management means the primary functions or activities that management performs to get things done.
(a) Process
(b) Achieving goals 
(c) Effectively 
(d) None of these

Correct Answer is Option (a)
Process in the definition of management means the primary functions or activities that management performs to get things done. These functions are planning, organising, staffing, directing and controlling.


Q.36: Mr. Batra is a hardworking and a dedicated manager in the renowned company “Colourwall” paints. He believes in team spirit and harmony among employees. In order to achieve the objectives of the company, as a manager he has always promoted teamwork. He has replaced ‘I’ with ‘We’ in all his conversations with workers to foster team spirit.
Which principle of management is followed by Mr. Batra in the above case?
(a) Equity 
(b) Order 
(c) Espirit de corps 
(d) Initiative

Correct Answer is Option (c)
Management should promote a team spirit of unity and harmony among employees, according to Fayol. Management should promote teamwork especially in large organisations because otherwise objectives would be difficult to realise. It will also result in a loss of coordination. A manager should replace ‘I’ with ‘We’ in all his conversations with workers to foster team spirit. This will give rise to a spirit of mutual trust and belongingness among team members. It will also minimise the need for using penalties.


Q.37: Which of the following statement is correct with respect to planning?
(a) Planning facilitates decision making. 
(b) Planning bridges the gap between where we are and where we want to go. 
(c) Planning means setting objectives and targets and formulating an action plan to achieve them. 
(d) All of the above

Correct Answer is Option (d)
Planning helps the manager to look into the future and make a choice from amongst various alternative courses of action. Objectives may be set for the entire organisation and each department or unit within the organisation. Objectives or goals specify what the organisation wants to achieve. Planning ensures that the goals or objectives are clearly stated so that they act as a guide for deciding what action should be taken and in which direction.


Q.38: For the following two statements choose the correct option:
Statement I: Marketing Mix is a set of marketing tools that a firm uses to pursue its marketing objectives in a target market.
Statement II: The components of the marketing mix consist of Product, Price, Place, and Personal.
Choose the correct option from the options given below:
(a) Statement I is correct and II is wrong.
(b) Statement II is correct and I is wrong.
(c) Both the statements are correct.
(d) Both the statements are incorrect.

Correct Answer is Option (c)
From a number of alternatives available a firm chooses a particular combination to develop a market offering. The combination of variables chosen by a firm to prepare its market offering is also called marketing mix. Thus, marketing mix is described as the set of marketing tools that a firm uses to pursue its marketing objectives in a target market. The marketing mix consists of various elements, which have broadly been classified into four categories, popularly known as four Ps of marketing. These are: Product, Price, Place, and Promotion.


Q.39: Delegation refers to the______  transfer of authority.
(a) Downward 
(b) Upward 
(c) Diagonal 
(d) None of these

Correct Answer is Option (a)
A manager, no matter how capable he is, cannot manage to do every task on his own. The volume of work makes it impractical for him to handle it all by himself. As a consequence, if he desires to meet the organisational goals, focus on objectives and ensure that all work is accomplished, he must delegate authority. Delegation refers to the downward transfer of authority from a superior to a subordinate. It is a pre-requisite to the efficient functioning of an organisation because it enables a manager to use his time on high priority activities.


Q.40: Planning is closely connected with:
(a) Creativity 
(b) Innovation 
(c) Both (A) and (B) 
(d) None of these

Correct Answer is Option (c)
Planning is one of the basic managerial functions. Before doing something, the manager must formulate an idea of how to work on a particular task. Thus, planning is closely connected with creativity and innovation. But the manager would first have to set objectives, only then will a manager know where he has to go. Planning seeks to bridge the gap between where we are and where we want to go.


Q.41: The objective of ‘Bright Colours’ is the procurement and sale of traditional Indian handloom and handicraft items. They sell fabrics, furnishings, ready-mades and household items made out of traditional Indian fabrics. The organization has to decide quantities, variety, colour and texture of all the above and then allocate resources for their purchase from different suppliers or for their inhouse development.
Which function of management is highlighted in the above text?
(a) Planning 
(b) Staffing 
(c) Controlling 
(d) Directing

Correct Answer is Option (a)
Planning is the function of determining in advance what is to be done and who is to do it. This implies setting goals in advance and developing a way of achieving them efficiently and effectively. Planning cannot prevent problems, but it can predict them and prepare contingency plans to deal with them if and when they occur.


Q.42: Efficiency means:
(a) Doing the task correctly 
(b) Involvement of minimum cost 
(c) Both (A) and (B) 
(d) None of these

Correct Answer is Option (c)
Management has to see that tasks are completed and goals are achieved (i.e., effectiveness) with the least amount of resources at a minimum cost (i.e., efficiency). Efficiency means doing the task correctly and with minimum cost. There is a kind of cost-benefit analysis involved and the relationship between inputs and outputs. If by using less resources (i.e., the inputs) more benefits are derived (i.e., the outputs) then efficiency has increased. Efficiency is also increased when for the same benefit or outputs, fewer resources are used and less costs are incurred.


Q.43: A managerial principle is a:
(a) Broad guideline for decision making and behaviour 
(b) General guideline for decision making and behaviour 
(c) Both (A) and (B) 
(d) None of these

Correct Answer is Option (c)
A managerial principle is a broad and general guideline for decision making and behaviour. For example, while deciding about promotion of an employee one manager may consider seniority, whereas the other may follow the principle of merit.


Q.44: The _______  environment of business in India has been changing at a fast rate mainly due to the changes in the economic policies of the government.
(a) Social 
(b) Political 
(c) Economic
(d) None of these

Correct Answer is Option (c)
The economic environment of business in India has been steadily changing mainly due to the government policies. In 1991 the economy faced a serious foreign exchange crisis, high government deficit and a rising trend of prices despite bumper crops. As a part of economic reforms, the Government of India announced a new industrial policy in July 1991. Appropriate measures were taken to remove obstacles in the way of growth and expansion of industrial units of large industrial houses. Small-scale sector was assured all help and accorded due recognition.


Q.45: Planning is an activity which is done by the _______.
(a) Production manager 
(b) Sales manager 
(c) Chief executing officer 
(d) Workers

Correct Answer is Option (c)
Planning is an activity which is done by the top management. Usually the rest of the members just implements these plans. As a consequence, middle management and other decision makers are neither allowed to deviate from plans nor are they permitted to act on their own. Thus, much of the initiative or creativity inherent in them also gets lost or reduced. Most of the time, employees do not even attempt to formulate plans. They only carry out orders. Thus, planning in a way reduces creativity since people tend to think along the same lines as others. There is nothing new or innovative.


Q.46: Diva Ltd. entered into the market with bags and have now introduced products like shoes, cosmetics, hair accessories, etc. The company is not only offering the products but also handling complaints and offering after-sales services. Which of the following element of marketing mix is discussed here?
(a) Price 
(b) Place 
(c) Promotion 
(d) Product

Correct Answer is Option (d)
Product means goods or services or ‘anything of value’, which is offered to the market for sale. The concept of product relates to not only the physical product but also the benefits offered by it from customer’s view point. The concept of product also includes the extended product or what is offered to the customers by way of after sales services, handling complaints, availability of spare parts etc.


Q.47: _______refers to additional layers of protection that are kept till the product is ready for use. 
(a) Secondary Packaging 
(b) Transportation Packaging 
(c) Primary Package 
(d) None of these

Correct Answer is Option (a)
Secondary Packaging: refers to additional layers of protection that are kept till the product is ready for use, e.g., a tube of shaving cream usually comes in a card board box. When consumers start using the shaving cream, they will dispose of the box but retain the primary tube.


Q.48: Yamuna Prasad, a small shopkeeper in Bikaner, Rajasthan used to sell the famous ‘Bhujia-Sev’. It was a quick-selling product for locals and foreign tourists. His second generation expanded the business and got ‘Yamuna Ki Bhujia’ registered with concerned authorities. Gradually the brand offered a wide range of products to its customers like namkeen, sweets, bakery items, etc. However, ‘Bhujia-Sev’ remained the most popular product of the brand creating maximum revenue. ‘His second generation expanded the business and got ‘Yamuna Ki Bhujia’ registered with concerned authorities.’ With reference to the given text ‘Yamuna ki Bhujia’ is a _________ giving it a legal protection against its use by anyone else.
(a) Brand value 
(b) Trademark 
(c) Trait mark 
(d) Brand mark

Correct Answer is Option (b)
A brand or part of a brand that is given legal protection is called trademark. The protection is given against its use by other firms. Thus, the firm, which got its brand registered, gets the exclusive right for its use. In that case, no other firm can use such name or mark in the country.


Section - C

Q.49: Read the following text and answer question on the basis of the same.
“Crispy” company are in the process to launch their first product in the market as potato chips in various flavours and has become a member of the Food Corporation Association. They are newly established company in the market. The chips were made of potato, edible vegetable oil and decided to sell in India with tag a line – Have Crispy Go crazy. The company is trying to increase its sale in the business. In product like chips the intermediaries play a very significant role. The company has decided to keep the prices low initially and start a vigorous promotional campaign to involve the intermediaries. The company has its own farms where pure organic potatoes products are grown. It has decided to go for newspaper advertisements, TV advertisements, celebrity involvement so that customers get information about the product and its features, etc. and are persuaded to purchase these products. They have also developed customer support services such as feedback and suggestions, if any, to improve upon their products. All these services aim at providing maximum satisfaction to the customers, which is the key to marketing success in modern days. As they were launching the product for the first time, the company wants the packaging of the product to be attractive and differentiated from other products.
Which element of marketing mix is highlighted in the below mentioned line: 
“It has decided to go for newspaper advertisements, TV advertisements, celebrity involvement so that customers get information about the product and its features, etc.”
(a) Promotion 
(b) Place 
(c) Price 
(d) Product

Correct Answer is Option (a)
Promotion of products and services include activities that communicate availability, features, merits, etc. of the products to the target customers and persuade them to buy it. Most marketing organisations, undertake various promotional activities and spend substantial amount of money on the promotion of their goods through using number of tools such as advertising, personal selling and sales promotion techniques.


Q.50: Read the following text and answer question on the basis of the same.
“Crispy” company are in the process to launch their first product in the market as potato chips in various flavours and has become a member of the Food Corporation Association. They are newly established company in the market. The chips were made of potato, edible vegetable oil and decided to sell in India with tag a line – Have Crispy Go crazy. The company is trying to increase its sale in the business. In product like chips the intermediaries play a very significant role. The company has decided to keep the prices low initially and start a vigorous promotional campaign to involve the intermediaries. The company has its own farms where pure organic potatoes products are grown. It has decided to go for newspaper advertisements, TV advertisements, celebrity involvement so that customers get information about the product and its features, etc. and are persuaded to purchase these products. They have also developed customer support services such as feedback and suggestions, if any, to improve upon their products. All these services aim at providing maximum satisfaction to the customers, which is the key to marketing success in modern days. As they were launching the product for the first time, the company wants the packaging of the product to be attractive and differentiated from other products.
Which function of marketing is highlighted in the below mentioned line:
“They have also developed customer support services such as feedback and suggestions, if any, to improve upon their products.”

(a) Branding 
(b) Customer Support Services 
(c) Pricing of Product
(d) Physical Distribution

Correct Answer is Option (b) 

A very important function of the marketing management relates to developing customer support services such as after sales services, handling customer complaints and adjustments, procuring credit services, maintenance services, technical services and consumer information. All these services aim at providing maximum satisfaction to the customers, which is the key to marketing success in modern days.


Q.51: Read the following text and answer question on the basis of the same.
“Crispy” company are in the process to launch their first product in the market as potato chips in various flavours and has become a member of the Food Corporation Association. They are newly established company in the market. The chips were made of potato, edible vegetable oil and decided to sell in India with tag a line – Have Crispy Go crazy. The company is trying to increase its sale in the business. In product like chips the intermediaries play a very significant role. The company has decided to keep the prices low initially and start a vigorous promotional campaign to involve the intermediaries. The company has its own farms where pure organic potatoes products are grown. It has decided to go for newspaper advertisements, TV advertisements, celebrity involvement so that customers get information about the product and its features, etc. and are persuaded to purchase these products. They have also developed customer support services such as feedback and suggestions, if any, to improve upon their products. All these services aim at providing maximum satisfaction to the customers, which is the key to marketing success in modern days. As they were launching the product for the first time, the company wants the packaging of the product to be attractive and differentiated from other products.
Which of the following importance of packaging is highlighted in the below mentioned line:
“As they were launching the product for the first time, the company wants the packaging of the product to be attractive and differentiated from other products.”

(a) Rising Standards of Health and Sanitation 
(b) Self Service Outlets
(c) Innovational Opportunity
(d) Product Differentiation

Correct Answer is Option (d) 

Packaging is one of the very important means of creating product differentiation. The colour, size, material etc., of package makes real difference in the perception of customers about the quality of the product. For example, by looking at the package of a product say Paint or Hair Oil, one can make some guess about quality of the product contained in it.


Q.52: Read the following text and answer question on the basis of the same.
“Crispy” company are in the process to launch their first product in the market as potato chips in various flavours and has become a member of the Food Corporation Association. They are newly established company in the market. The chips were made of potato, edible vegetable oil and decided to sell in India with tag a line – Have Crispy Go crazy. The company is trying to increase its sale in the business. In product like chips the intermediaries play a very significant role. The company has decided to keep the prices low initially and start a vigorous promotional campaign to involve the intermediaries. The company has its own farms where pure organic potatoes products are grown. It has decided to go for newspaper advertisements, TV advertisements, celebrity involvement so that customers get information about the product and its features, etc. and are persuaded to purchase these products. They have also developed customer support services such as feedback and suggestions, if any, to improve upon their products. All these services aim at providing maximum satisfaction to the customers, which is the key to marketing success in modern days. As they were launching the product for the first time, the company wants the packaging of the product to be attractive and differentiated from other products.
Which element of marketing mix is highlighted in the below mentioned line ?
“In product like chips the intermediaries play a very significant role in distribution”

(a) Product
(b) Price
(c) Place
(d) Promotion

Correct Answer is Option (c) 

Place or Physical Distribution include activities that make firm’s products available to the target customers.


Q.53: Read the following text and answer question on the basis of the same.
“Crispy” company are in the process to launch their first product in the market as potato chips in various flavours and has become a member of the Food Corporation Association. They are newly established company in the market. The chips were made of potato, edible vegetable oil and decided to sell in India with tag a line – Have Crispy Go crazy. The company is trying to increase its sale in the business. In product like chips the intermediaries play a very significant role. The company has decided to keep the prices low initially and start a vigorous promotional campaign to involve the intermediaries. The company has its own farms where pure organic potatoes products are grown. It has decided to go for newspaper advertisements, TV advertisements, celebrity involvement so that customers get information about the product and its features, etc. and are persuaded to purchase these products. They have also developed customer support services such as feedback and suggestions, if any, to improve upon their products. All these services aim at providing maximum satisfaction to the customers, which is the key to marketing success in modern days. As they were launching the product for the first time, the company wants the packaging of the product to be attractive and differentiated from other products.
What kind of a product chips is?
(a) Non-durable
(b) Durable
(c) Shopping
(d) Speciality 

Correct Answer is Option (a) 

The consumer products which are normally consumed in one or few uses are called non-durable products. For example, we purchase products like toothpaste, detergents, bathing soap and stationary products etc. From the marketing point of view, these products generally command a small margin, should be made available in many locations and need to be heavily advertised.


Q.54: Read the following text and answer question on the basis of the same.
“Crispy” company are in the process to launch their first product in the market as potato chips in various flavours and has become a member of the Food Corporation Association. They are newly established company in the market. The chips were made of potato, edible vegetable oil and decided to sell in India with tag a line – Have Crispy Go crazy. The company is trying to increase its sale in the business. In product like chips the intermediaries play a very significant role. The company has decided to keep the prices low initially and start a vigorous promotional campaign to involve the intermediaries. The company has its own farms where pure organic potatoes products are grown. It has decided to go for newspaper advertisements, TV advertisements, celebrity involvement so that customers get information about the product and its features, etc. and are persuaded to purchase these products. They have also developed customer support services such as feedback and suggestions, if any, to improve upon their products. All these services aim at providing maximum satisfaction to the customers, which is the key to marketing success in modern days. As they were launching the product for the first time, the company wants the packaging of the product to be attractive and differentiated from other products.
“All these services aim at providing maximum satisfaction to the customers, which is the key to marketing success in modern days.” Which of the following marketing concept is being discussed in these lines?
(a) Product
(b) Social
(c) Marketing
(d) Selling

Correct Answer is Option (c)

Marketing orientation implies that focus on satisfaction of customer’s needs is the key to the success of any organisation in the market. It assumes that in the long run an organisation can achieve its objective of  aximization of profit by identifying the needs of its present and prospective buyers and satisfying them in an effective way. All the decisions in a firm are taken from the point of view of the customers. In other words, customer’s satisfaction become the focal point of all decision making in the organisation.


Q.55: Softie is a company that manufactures towels. The company has its headquarters in Delhi and have its branches in Mumbai and Gujarat. The company decided to open one more branch in Uttar Pradesh. For this the company has already planned its operations and decided on the objectives. The work was identified and divided in accordance with the determined plans and accordingly the departments was formed. Jobs are now to be allocated to the members of each department in accordance to their skills and competencies.
Identify the step in the process of organizing followed in the lines “Jobs are now to be allocated to the members of each department in accordance to their skills and competencies.”
(a) Assignment of duties 
(b) Establishing authority and reporting relationships 
(c) Identification and division of work 
(d) Departmentalisation

Correct Answer is Option (a)
It is necessary to define the work of different job positions and accordingly allocate work to various employees. Once departments have been formed, each of them is placed under the charge of an individual. Jobs are then allocated to the members of each department in accordance to their skills and competencies. It is essential for effective performance that a proper match is made between the nature of a job and the ability of an individual. The work must be assigned to those who are best fitted to perform it well.


Q.56: To make the school fete of the school successful the principal of the school divided all the activities into various task groups each dealing with a specific area like food committee, the decoration committee, the ticketing committee and so on. Each group was placed under the overall supervision of a senior teacher. Identify the function of management discussed above.
(a) Planning 
(b) Organizing 
(c) Staffing 
(d) Controlling

Correct Answer is Option (b)
The management function of organising ensures that efforts are directed towards the attainment of goals laid down in the planning function in such a manner that resources are used optimally and people are able to work collectively and effectively for a common purpose. Organising essentially implies a process which coordinates human efforts, assembles resources and integrates both into a unified whole to be utilised for achieving specified objectives.


Q.57: Agro ltd is a spice manufacturing company. They deal with whole lot of spices such as Chhole masala, Rajma masala, Turmeric powder etc. The company has forecasted the demand of their products by making certain assumptions? Which is next step the Agro ltd will follow in their business?
(a) Setting Objectives 
(b) Developing Premises 
(c) Selecting an alternative 
(d) Identifying alternative courses of action

Correct Answer is Option (b)
Planning is concerned with the future which is uncertain and every planner is using conjecture about what might happen in future. Therefore, the manager is required to make certain assumptions about the future. These assumptions are called premises. Assumptions are the base material upon which plans are to be drawn. The base material may be in the form of forecasts, existing plans or any past information about policies. Forecasting is important in developing premises as it is a technique of gathering information. Forecasts can be made about the demand for a particular product, policy change, interest rates, prices of capital goods, tax rates etc. Accurate forecasts, therefore become essential for successful plans.


Q.58: “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 Coronavirus.” Identify the feature of business environment being described above.
(a) Specific and general forces 
(b) Inter-relatedness 
(c) Relativity 
(d) None of the above

Correct Answer is Option (b)
Different elements or parts of business environment are closely interrelated. For example, increased life expectancy of people and increased awareness for health care have increased the demand for many health products and services like soft drinks, fat-free cooking oil, and health resorts. New health products and services have, in turn, changed people’s life styles.


Q.59: The CEO of the company which is diversified in many products wanted to maintain its sovereignty in the market. The company has clients all over the world. Recently they had a meeting in which all the reasons which were outside the control of the organisation were discussed. However, when it comes to the evaluation, the CEO of the company found that conditions were different in different countries so the strategies adopted would have to be different and have to products according to taste and culture of that country. 
Identify the feature of Business Environment discussed in the above case?
(a) Relativity 
(b) Specific and general forces
(c) Uncertainty 
(d) Complexity

Correct Answer is Option (a)
Business environment is a relative concept since it differs from country to country and even region to region. Political conditions in the USA, for instance, differ from those in China or Pakistan. Similarly, demand for sarees may be fairly high in India whereas it may be almost non-existent in France.


Q.60: “Extreme fans” is a fan manufacturing company. The managing director of the company wanted to increase the productivity. So, he promised his employees for bonus for extra production. He also said that those who will work more efficient than others and put extra time will be paid extra according to the number of hours. However, some people who worked efficiently than others and worked hard later complained that they were not compensated for the extra units of the production and extra number of hours so demanded in the job. Which technique of scientific management is not followed over here by the managing director?
(a) Differential Piece Wage System 
(b) Fatigue Study 
(c) Time Study 
(d) Motion Study

Correct Answer is Option (a)
Taylor was a strong advocate of piece wage system. He wanted to differentiate between efficient and inefficient workers. He wanted to reward efficient workers. So he introduced different rate of wage payment for those who performed above standard and for those who performed below standard. Search for efficiency requires the search for one best method and the chosen method must lead to the determination of a fair day’s work. There must be a compensation system that differentiates those who are able to accomplish/exceed the fair day’s work. This differential system must be based on the premise that efficiency is the result of the joint efforts of the managers and the workers.

The document Class 12 Business Studies: CBSE Sample Question Papers- Term I (2021-22)- 4 Notes | Study Sample Papers for Class 12 Commerce - Class 12 is a part of the Class 12 Course Sample Papers for Class 12 Commerce.
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