Class 12 Business Studies: CBSE Sample Question Papers- Term I (2021-22)- 3 | Sample Papers for Class 12 Commerce PDF Download

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.

Q.1: “Scientific principles are first developed through observation and then tested through repeated experimentation under controlled conditions”. The feature of management as a science being referred to in the above statement is:
(a) Restricted entry
(b) Principles based on experimentation
(c) Professional association
(d) Ethical code of conduct

Correct Answer is Option (b)

Principles based on experimentation is a feature of science. Rest all the features are of profession. Scientific principles are first developed through observation and then tested through repeated experimentation under controlled conditions. The principles of management have evolved over a period of time based on repeated experimentation and observation in different types of organisations. However, since management deals with human beings and human behaviour, the outcomes of these experiments are not capable of being accurately predicted or replicated.

Q.2: The term ‘business environment’ means:
(a) The sum total of all individuals 
(b) The sum total of all institutions 
(c) Other forces that are outside the control of a business enterprise 
(d) All of the above

Correct Answer is Option (d)
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. 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.

Q.3: “Plans are prepared for a specific period of time, may be for a month, a quarter, or a year”. The feature of planning being referred to in the above statement is:
(a) Planning is a continuous process. 
(b) Planning is futuristic. 
(c) Planning is pervasive. 
(d) Planning is a mental exercise.

Correct Answer is Option (a)
Plans are prepared for a specific period of time, may be for a month, a quarter, or a year. At the end of that period there is need for a new plan to be drawn on the basis of new requirements and future conditions. Hence, planning is a continuous process. Continuity of planning is related with the planning cycle. It means that a plan is framed, it is implemented, and is followed by another plan, and so on.

Q.4: Which of the following is not related to ‘Organising as a Process’?
(a) Initiates implementation of plans. 
(b) Provides framework for performing managerial and operating tasks. 
(c) Clarifies jobs and working relationship. 
(d) Effectively deploys resources. 

Correct Answer is Option (b)
Organising is a process that initiates implementation of plans by clarifying jobs and working relationships and effectively deploying resources for attainment of identified and desired results.

Q.5: Decentralisation awards greater autonomy to which of the following level of management?
(a) Lower levels of management 
(b) Divisional or departmental heads 
(c) Top levels of management 
(d) Lower levels of management as well as divisional or departmental heads

Correct Answer is Option (d)
Decentralisation awards greater autonomy to the lower levels of management as well as divisional or departmental heads. This allows them to function in a manner best suited to their department and fosters a sense of competition amongst the departments. Consequently, with each department doing its best in a bid to outdo the other, the productivity levels increase and the organisation is able to generate more returns which can be used for expansion purposes.

Q.6: In order to get feedback about its recently launched immunity-boosting ayurvedic medicine, Atulya Limited conducted an online survey using a questionnaire, to gather customer views and opinions. Identify the marketing function being used by Atulya Limited.
(a) Standardisation 
(b) Product designing 
(c) Customer support service 
(d) Gathering and analysing market information

Correct Answer is Option (d)
One of the important functions of a marketer is to gather and analyse market information. This is necessary to identify the needs of the customers and take various decisions for the successful marketing of the products and services. This is important for making an analysis of the available opportunities and threats as well as strengths and weaknesses of the organisation.

Q.7: “A marketer of colour TV, having 10 percent of the current market share in the country, aims at enhancing his market share to 20 percent, in the next three years.” Identify the function of marketing highlighted in the above text.
(a) Gathering and Analysing Market Information 
(b) Marketing Planning 
(c) Product Designing and Development 
(d) Customer Support Services

Correct Answer is Option (b)
Another important activity or area of work of a marketer is to develop appropriate marketing plans so that the marketing objectives of the organisation can be achieved. For example, a marketer of colour TV, having 10 per cent of the current market share in the country, aims at enhancing his market share to 20 per cent, in the next three years. He will have to develop a complete marketing plan covering various important aspects including the plan for increasing the level of production, promotion of the products, etc. and specify the action programmes to achieve these objectives.

Q.8: The main focus of ___________ concept is the existing product. 
(a) Product 
(b) Promotion 
(c) Marketing 
(d) Selling

Correct Answer is Option (d)
Selling concept assumed that the customers would not buy, or not buy enough, unless they are adequately convinced or motivated to do so.

Q.9: Which of the following is an advantage of functional structure?
(a) Leads to occupational specialisation. 
(b) Promotes control and coordination within a department. 
(c) Helps in increasing managerial and operational efficiency. 
(d) All of the above. 

Correct Answer is Option (d)
A functional structure leads to occupational specialisation since emphasis is placed on specific functions. It promotes control and coordination within a department because of similarity in the tasks being performed. It helps in increasing managerial and operational efficiency and this results in increased profit.

Q.10: Which of the following statements is false with respect to Planning?
(a) It is one of the basic managerial functions. 
(b) Planning is closely connected with creativity and innovation. 
(c) It requires taking decisions. 
(d) None of the above 

Correct Answer is Option (d)
Planning lays down the base for other functions of management. Planning involves setting targets and predicting future conditions, thus helping in taking rational decisions.

Q.11: The principle of ____________ states that ‘A place for everything (everyone) and everything (everyone) in its (her/his) place’. 
(a) Stability of Personnel 
(b) Equity 
(c) Order 
(d) Initiative

Correct Answer is Option (c)
According to Fayol, “People and materials must be in suitable places at appropriate time for maximum efficiency.” The principle of order states that ‘A place for everything (everyone) and everything (everyone) in its (her/his) place’. Essentially it means orderliness. If there is a fixed place for everything and it is present there, then there will be no hindrance in the activities of business/ factory. This will lead to increased productivity and efficiency.

Q.12: It is determined that standard output per worker per day is 10 units and those who made standard or more than standard will get ₹50 per unit and those below will get ₹40 per unit. Now an efficient worker making 11 units will get 11 × ₹50 = ₹550 per day whereas a worker who makes 9 units will get 9 × ₹40 = ₹360 per day.
Identify the technique of scientific study mentioned in the above text.
(a) Differential Piece Wage System 
(b) Fatigue study 
(c) Motion study 
(d) Method study

Correct Answer is Option (a)
Taylor was a strong advocate of piece wage system. He wanted to differentiate between efficient and inefficient workers. The workers can then be classified as efficient or inefficient on the basis of these standards. 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.

Q.13: Management is a ____________activity that has three main dimensions.
(a) Complex 
(b) Simple 
(c) Effortless 
(d) None of these

Correct Answer is Option (a)
Management is a complex activity that has three main dimensions. These are Management of work, Management of people and Management of operations. All organisations are set up to perform some task or goal. Management activities aim at achieving goals or tasks to be accomplished. People refer to Human resources and Human resources are the most important assets of an organisation. Management of operations concentrates on mixing management of work with management of people, i.e., deciding what work has to be done, how it has to be done and who will do it.

Q.14: “The significance of political conditions in business success lies in the predictability of business activities under stable political conditions”.
Which of the following dimension of business environment is described in the above lines?
(a) Legal
(b) Economic
(c) Social
(d) Political

Correct Answer is Option (d)
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. On the other hand, there may be uncertainty of business activities due to political unrest and threats to law and order.

Q.15: “Social, political, legal and technological conditions have impact on all business enterprises and thus may affect an individual firm only indirectly”. Identify the force of one of the features of business environment is.
(a) External force
(b) Specific force
(c) General force
(d) Infernal force

Correct Answer is Option (c)
Business environment includes both specific and general forces. Specific forces (such as investors, customers, competitors and suppliers) affect individual enterprises directly and immediately in their day-today working. General forces (such as social, political, legal and technological conditions) have impact on all business enterprises and thus may affect an individual firm only indirectly.

Q.16: “If the end result is clear it becomes easier to work towards the goal.” The step in the process of planning being referred to in the above statement is:
(a) Implementing the plan 
(b) Selecting one best alternative 
(c) Evaluating alternative course of action 
(d) Setting objectives

Correct Answer is Option (d)
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. It could mean an increase in sales by 20% which could be objective of the entire organisation. Objectives should be stated clearly for all departments, units and employees. They give direction to all departments. Departments/ units then need to set their own objectives within the broad framework of the organisation’s philosophy. Objectives have to percolate down to each unit and employees at all levels. At the same time, managers must contribute ideas and participate in the objective setting process. They must also understand how their actions contribute to achieving objectives. If the end result is clear it becomes easier to work towards the goal.

Q.17: Which of the following statements is incorrect?
(a) Superior-Subordinate relationship is the source of origin of ‘Responsibility’. 
(b) Authority arises from the established ‘scalar chain’ which links various job positions and levels of an organisation. 
(c) Centralisation leads to quick decision making. 
(d) None of the above 

Correct Answer is Option (c)
In centralisation, the top management directs the day to day operations, and the subordinates have to report directly to the senior management. At times when there is no managerial staff, the subordinates are unable to take immediate decisions, thus, resulting in slowing down of business operations.

Q.18: Which of the following functions of marketing helps in building customer’s loyalty and in promoting its sale?
(a) Standardisation 
(b) Branding 
(c) Pricing of Products 
(d) Grading 

Correct Answer is Option (b)
Branding means giving an attractive name, symbol or identity mark to the product to make a product different from others so that it is known by that name or symbol or mark.

Q.19: Which of the following statements is true regarding marketing?
(a) It is a process whereby people exchange goods and services for money. 
(b) It has been referred to as performance of business activities that direct the flow of goods and services from producers to consumers. 
(c) It includes many activities that are performed even before goods are actually produced and continue even after the goods have been sold. 
(d) All of the above 

Correct Answer is Option (d)
Marketing refers to the process of ascertaining consumers’ needs and supplying various goods and services to the final consumers or users to satisfy those needs. Basically, marketing is the performance of business activities that direct the flow of goods and services from producers to consumers or users.

Q.20: Why labelling is important?
(a) Describe the Product and Specify its Contents. 
(b) Identification of the Product or Brand. 
(c) Grading of Products. 
(d) All of the above

Correct Answer is Option (d)
A label provides complete information regarding the product. It mainly includes ingredients of the product, its usage, and caution in use, cares to be taken while using it, date of manufacturing, batch number, etc. It is easier to identify a particular product among many with the help of labeling. Thus, it helps in identifying the product or brand. Another important function performed by labels is to help grading the products into different categories.

Q.21: _______is an unpaid form of communication.
(a) Personal selling 
(b) Public relations 
(c) Advertisement 
(d) Publicity

Correct Answer is Option (d)
Publicity is an unpaid form of communication. It does not involve any direct expenditure by the marketing firm. Publicity generally takes place when favorable news is presented in the mass media about a product or service. In publicity, as the information is disseminated by an independent source, e.g., the press in the form of news stories and features, the message has more credibility than if that comes as a sponsored message in advertising.

Q.22: Planning may not work in __________ environment.
(a) Constant 
(b) Stable 
(c) Dynamic 
(d) None of these

Correct Answer is Option (c)
Planning cannot foresee everything and thus, there may be obstacles to effective planning. The business environment is dynamic, nothing is constant. The environment consists of a number of dimensions, economic, political, physical, legal and social dimensions. The organisation has to constantly adapt itself to changes. It becomes difficult to accurately assess future trends in the environment if economic policies are modified or political conditions in the country are not stable or there is a natural calamity.

Q.23: “Rise in the disposable income of people due to increase in the gross domestic product of a country creates increasing demand for products.” Identify the dimension of business environment highlighted in the above text?
(a) Social 
(b) Economic 
(c) Legal 
(d) Political

Correct Answer is Option (b)
Interest rates, inflation rates, changes in disposable income of people, stock market indices and the value of rupee are some of the economic factors that can affect management practices in a business enterprise. Short- and long-term interest rates significantly affect the demand for product and services.

Q.24: The principles of management are formed by the
(a) Experience of managers 
(b) Collective wisdom of managers 
(c) Experimentation of managers 
(d) All of the above

Correct Answer is Option (d)
The principles of management are formed by experience and collective wisdom of managers as well as experimentation. For example, it is a matter of common experience that discipline is indispensable for accomplishing any purpose. This principle finds mention in management theory. On the other hand, in order to remedy the problem of fatigue of workers in the factory, an experiment may be conducted to see the effect of improvement of physical conditions to reduce stress.

Q.25: 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

Correct Answer is Option (d)
Business environment includes both specific and general forces. Business environment is dynamic, i.e., it keeps on changing whether in terms of technological improvement, shifts in consumer preferences or entry of new competition in the market. Business environment is a relative concept since it differs from country to country and even region to region.

Q.26: “Monitoring the plans is equally important to ensure that objectives are achieved”. Which of the following step of planning process is highlighted in the above lines?
(a) Implementing the Plan
(b) Selecting One Best Alternative
(c) Evaluating Alternative Course of Action
(d) Follow Up Action

Correct Answer is Option (d)
To see whether plans are being implemented and activities are performed according to schedule is also part of the planning process. Monitoring the plans is equally important to ensure that objectives are achieved.

Q.27: “The focus of business activity changed to bringing continuous improvement in the quality, incorporating new features etc.” Identify the concept of marketing management highlighted by this statement.
(a) Production concept 
(b) Product Concept 
(c) Societal concept 
(d) Marketing Concept

Correct Answer is Option (b)
With the increase in the supply of the products, customers started looking for products which were superior in quality, performance and features. Therefore, the emphasis of the firms shifted from quantity of production to quality of products. The focus of business activity changed to bringing continuous improvement in the quality, incorporating new features etc. Thus, product improvement became the key to profit maximisation of a firm, under the concept of product orientation.

Q.28: Kartik, who was running a grocery shop decided to sell his grocery items online so that he can reach out to mass customers over large geographical area and increase its sales. He created a website with the name “Dailyneeds.com” for taking orders online. He earned huge profits by selling the items online. Identify and explain the dimensions of business environment discussed in the above case.
(a) Social 
(b) Technological 
(c) Legal 
(d) Political

Correct Answer is Option (b)
Technological Environment includes forces relating to scientific improvements and innovations which provide new ways of producing goods and services and new methods and techniques of operating a business. Technological environment includes forces relating to scientific improvements and innovations which provide new ways of producing goods and services and new methods and techniques of operating a business.

Q.29: Oberoi Group of Companies is manufacturing washing machines. A business needs to add to its prospects in the long run, for this it is important for the business to grow. The company decided to diversify and to increase the manufacturing of number of products such televisions, water coolers, refrigerators, etc. Which economic objective of management does the business seek to fulfill?
(a) Survival 
(b) Growth 
(c) Profit 
(d) Efficiency

Correct Answer is Option (b)
A business needs to add to its prospects in the long run, for this it is important for the business to grow. To remain in the industry, management must exploit fully the growth potential of the organisation. Growth of a business can be measured in terms of sales volume increase in the number of employees, the number of products or the increase in capital investment, etc. There can be other indicators of growth.

Q.30: Which of the following functions are involved in the performance of marketing management?
(a) Analysing and planning the marketing activities. 
(b) Implementing marketing plans. 
(c) Setting control mechanism. 
(d) All of the above

Correct Answer is Option (d)
Marketing management involves performance of various functions such as analysing and planning the marketing activities, implementing marketing plans and setting control mechanism. These functions are to be performed in such a way that organisation’s objectives are achieved at the minimum cost.

Q.31: Markbon is a company which deals with providing car accessories and other electronic parts all over the country. Mr. Sahil is the CEO of the company, Mr. Rakesh is a HR manager, Mr. Anil is a marketing manager and Mr. Kush is a finance manager. Mr. Sahil tries its level best to synchronize the activities of different departments in the best possible manner to achieve the organizational goals. Identify the concept of management highlighted above. 
(a) Organizing 
(b) Directing 
(c) Coordination 
(d) Planning

Correct Answer is Option (c)
Coordination involves synchronisation of the different actions or efforts of the various units of an organisation. The purpose of coordination is to secure unity of action in the realisation of a common purpose. It acts as the binding force between departments and ensures that all action is aimed at achieving the goals of the organisation. The production and sales department have to coordinate their work, so that production takes place according to the demand in the market.

Q.32: For the following two statements choose the correct option:
Statement I: Responsibility is derived from accountability and accountability is derived from authority.
Statement II: When an employee is given responsibility for a job, he must also be given the degree of authority necessary to carry it out.
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 (b)
For effective delegation the authority granted must be commensurate with the assigned responsibility. If authority granted is more than responsibility, it may lead to misuse of authority, and if responsibility assigned is more than authority it may make a person ineffective. Responsibility is derived from authority and accountability is derived from responsibility. When an employee is given responsibility for a job, he must also be given the degree of authority necessary to carry it out. Thus, for effective delegation the authority granted must be commensurate with the assigned responsibility. If authority granted is more than responsibility, it may lead to misuse of authority, and if responsibility assigned is more than authority it may make a person ineffective.

Q.33: Sales person is asked to clinch a deal with a buyer and is allowed to give 10% discount by the marketing manager. But finance department tells her/him not to offer more than 5% discount. The Principle of management given by Fayol being violated is __________
(a) Remuneration 
(b) Equity 
(c) Discipline 
(d) Unity of Command

Correct Answer is Option (d)
According to Fayol there should be one and only one boss for every individual employee. If an employee gets orders from two superiors at the same time the principle of unity of command is violated. The principle of unity of command states that each participant in a formal organisation should receive orders from and be responsible to only one superior. Fayol gave a lot of importance to this principle.

Q.34: Bimal, the owner of ‘Reliable Constructions’ decided to begin a campaign in order to create awareness among the residents for creating a clean and safe environment. In an effort to develop clean surroundings in the area, he formed a team of 20 members to list the different ways that can be adopted for keeping the area clean. An organisational design was chosen which grouped similar activities together in order to minimize duplication of effort. After identification and grouping of these activities, the work was allocated among the different members.
Which step under the process of organizing is being referred to in this line?
(a) Identification and division of work
(b) Departmentalisation
(c) Assignment of duties
(d) Establishing reporting relationships

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.

Q.35: Making timetable in an educational institute is an example of _________
(a) Organising 
(b) Coordination 
(c) Controlling 
(d) None of these

Correct Answer is Option (b)
The process of coordinating the activities of an organisation begins at the planning stage itself. Planning is the elementary stage of achieving co-ordination. When various functions are properly planned and various policies are integrated then co-ordination will be easily achieved.

Q.36: Planning requires application of the mind involving foresight, intelligent imagination and sound judgement. The feature of planning being referred to in the above statement is:
(a) Planning is a continuous process. 
(b) Planning is futuristic. 
(c) Planning is pervasive. 
(d) Planning is a mental exercise.

Correct Answer is Option (d)
Planning requires application of the mind involving foresight, intelligent imagination and sound judgement. It is basically an intellectual activity of thinking rather than doing, because planning determines the action to be taken. However, planning requires logical and systematic thinking rather than guess work or wishful thinking. In other words, thinking for planning must be orderly and based on the analysis of facts and forecasts.

Q.37: Regal Ltd. has appointed Mr. Akash Ahuja as a production manager. What will be his basic task?
(a) To integrate diverse elements and coordinate activities of different departments. 
(b) To interpret the policies framed by top management. 
(c) To oversee the efforts of the workforce. 
(d) To formulate overall organisational goals.

Correct Answer is Option (b)
Middle Management is the link between top and lower level managers. They are subordinate to top managers and superior to the first line managers. They are usually known as division heads, for example production manager. Middle management is responsible for implementing and controlling plans and strategies developed by top management. At the same time, they are responsible for all the activities of first line managers. Their main task is to carry out the plans formulated by the top managers.

Q.38: What is a marketer’s job in an organisation?
(a) To identify needs of the target customers. 
(b) To develop products and services that satisfy needs. 
(c) Both (A) and (B) 
(d) None of the above

Correct Answer is Option (c)
The process of marketing helps individuals and groups in obtaining what they need and want. Needs are basic to human beings and do not pertain to a particular product. A marketer’s job in an organisation is to identify needs of the target customers and develop products and services that satisfy such needs.

Q.39: Ram and Mohan are the managing directors of two different companies. They both met at a business conference. While discussing about their businesses Ram said to Mohan in order to be successful, an organisation must change itself and its goals according to the needs of the environment. Which characteristic of management was the Ram referring?
(a) Management is a continuous process.
(b) Management is all pervasive.
(c) Management is multidimensional.
(d) Management is a dynamic function.

Correct Answer is Option (d)
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.40: Which of the following objectives of the management is related to the usage of environmentally friendly methods of production? 
(a) Organisational Objectives 
(b) Social objectives 
(c) Personal objectives 
(d) None of these

Correct Answer is Option (b)
Social objectives involves the creation of benefit for society. As a part of society, every organisation whether it is business or non-business, has a social obligation to fulfill. This refers to consistently creating economic value for various constituents of society. This includes using environmentally friendly methods of production, giving employment opportunities to the disadvantaged sections of society.

Q.41: Planning is always __________.
(a) Materialistic 
(b) Futuristic 
(c) Conservative 
(d) None of these

Correct Answer is Option (b)
Planning essentially involves looking ahead and preparing for the future. The purpose of planning is to meet future events effectively to the best advantage of an organisation. It implies peeping into the future, analysing it and predicting it. Planning is, therefore, regarded as a forwardlooking function based on forecasting. Through forecasting, future events and conditions are anticipated and plans are drawn accordingly.

Q.42: The objective of time study is to:
(a) Determine the number of workers to be employed 
(b) Frame suitable incentive schemes 
(c) Determine labour costs 
(d) All of the above

Correct Answer is Option (d)
Time Study determines the standard time taken to perform a well-defined job. Time measuring devices are used for each element of task. The standard time is fixed for the whole of the task by taking several readings. The method of time study will depend upon volume and frequency of the task, the cycle time of the operation and time measurement costs. The objective of time study is to determine the number of workers to be employed; frame suitable incentive schemes and determine labour costs.

Q.43: For the following two statements choose the correct option:
Statement I: Under the production concept, greater emphasis was placed on improving the production and distribution efficiency of the firms.
Statement II: Product improvement became the key to profit maximisation of a firm, under the concept of product orientation.
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)
Production Concept states that the highly affordable and available products are preferred by the consumers. This means that the success of the company is based upon the effective production and distribution of the products. The focus of business activities was, therefore, on production of goods. Thus, availability and affordability of the product were considered to be the key to the success of a firm. The focus of business activity changed to bringing continuous improvement in the quality, incorporating new features etc. Thus, product improvement became the key to profit maximisation of a firm, under the concept of product orientation.

Q.44: Ramco Ltd. has recently adopted a new technology for the greater good of the people and leads the path towards growth and development. The following importance of management is highlighted above:
(a) Management helps in achieving personal objectives. 
(b) Management helps in the development of society. 
(c) Management creates a dynamic organisation. 
(d) Management increases efficiency.

Correct Answer is Option (b)
An organisation has multiple objectives to serve the purpose of the different groups that constitute it. In the process of fulfilling all these, management helps in the development of the organisation and through that it helps in the development of society. It helps to provide good quality products and services, creates employment opportunities, adopts new technology for the greater good of the people and leads the path towards growth and development.

Q.45: Sana inherited a 20-acre ancestral land from her grandparents. She decided to venture into agriculture. For this purpose, she set out specific goals, objectives and activities. She eventually launched her own company Agricultural Solutions Ltd. She wanted to be sure that the activities effectively met the best interests of the company and the farmers. Hence, she prepared an annual plan for production, sales and marketing through sales forecasting. She also realized that farmers were growing only one or two crops. On account of this; the land remained idle for the rest of the year. She identified and evaluated different alternatives through which the farms could be utilized throughout the year. “Thus, she identified and evaluated different alternatives through which the farms could be utilized throughout the year.” Which feature of planning is depicted in the statement?
(a) Planning is pervasive. 
(b) Planning is continuous. 
(c) Planning is futuristic. 
(d) Planning involves decision-making.

Correct Answer is Option (d)
Planning essentially involves choice from among various alternatives and activities. If there is only one possible goal or a possible course of action, there is no need for planning because there is no choice. The need for planning arises only when alternatives are available. In actual practice, planning presupposes the existence of alternatives. Planning, thus, involves thorough examination and evaluation of each alternative and choosing the most appropriate one.

Q.46: The objective of one of the techniques of scientific management is “to reduce a given line or product to fixed types, sizes and characteristics.” Identify the technique of scientific management.
(a) Standardization 
(b) Method study 
(c) Motion study 
(d) Time study

Correct Answer is Option (a)
Standardisation refers to the process of setting standards for every business activity; it can be standardisation of process, raw material, time, product, machinery, methods or working conditions. These standards are the benchmarks, which must be adhered to during production. The objective of standardization is to reduce a given line or product to fixed types, sizes and characteristics.

Q.47: The offer is for a cell phone, available in four different versions, on the basis of certain features such as size of memory, television viewing, internet, camera, etc., for a given price, say between ₹5,000 and ₹20,000 (depending on the model selected), available for sale at say firm’s exclusive shops in and around all metropolitan cities in the country.
The important feature of marketing illustrated above is:
(a) Exchange mechanism
(b) Customer value
(c) Creating a market offering
(d) Needs and wants

Correct Answer is Option (c)
On the part of the marketers, the effort involves creation of a ‘market offering. Market offering refers to a complete offer for a product or service, having given features like size, quality, taste, etc; at a certain price; available at a given outlet or location and so on. Let us say the offer is for a cell phone, available in four different versions, on the basis of certain features such as size of memory, television viewing, internet, camera, etc., for a given price, say between ₹5,000 and ₹20,000 (depending on the model selected), available for sale at say firm’s exclusive shops in and around all metropolitan cities in the country. A good ‘market offer’ is the one which is developed after analysing the needs and preferences of the potential buyers.

Q.48: Assertion (A): Planning reduces overlapping and wasteful activities.
Reason (R): Planning helps in detecting inefficiencies and taking corrective measures to deal with them.
(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)
Planning serves as the basis of coordinating the activities and efforts of different divisions, departments and individuals. It helps in avoiding confusion and misunderstanding. Since planning ensures clarity in thought and action, work is carried on smoothly without interruptions. Useless and redundant activities are minimised or eliminated. It is easier to detect inefficiencies and take corrective measures to deal with them.

Q.49: Read the following text and answer question on the basis of the same.
Ms. Neeta Deshmukh, began her journey in the publishing industry in the year 2000. She believes Education is crucial for every child growing.  It is most important tool to change one’s life. It improves one’s knowledge, skills and develops the personality and attitude. To simplify learning and empower every student to unleash their maximum potential, she founded “Books for everyone”. It is one of the top most publisher house in education and publishing industry. They not only publish books for all the leading boards like CBSE, ISC, ICSE etc. but also books for competitive exams like JEE, NEET, CAT etc. The books are offered to the market on some value for sale and there are large number of consumers for the product who are scattered over a wide geographical area. The books so published needs to be distributed all over the India. For this, she needs to first contact selling agents or brokers who connect them with wholesalers and then finally to the retailers. In spite of putting all her efforts in the business, she realizes that the business was not growing that much as she expected. The sales and profits figure started declining. She decided to speak to her marketing department. The marketing manager after doing analysis, found that we are lacking in promoting the product.  They need to choose a proper promotional tool through which a large number of people can be reached over a vast geographical area. Ms. Neeta was also open to any suggestions and feedback from students and teachers so that she can improve upon and increase the sales of the books. She wants to sell the best content in the book as she knows that a product will be purchased only if it is perceived to be giving greatest benefit or value for the money.

Identify the element of marketing mix stated in the below mentioned line: 
“The books are offered to the market on some value for sale”.
(a) Product 
(b) Price 
(c) Promotion 
(d) Place

Correct Answer is Option (a)
Product means goods or services or ‘anything of value’, which is offered to the market for sale. In marketing, product is a mixture of tangible and intangible attributes, which are capable of being exchanged for a value, with ability to satisfy customer needs.

Q.50: Read the following text and answer question on the basis of the same.
Ms. Neeta Deshmukh, began her journey in the publishing industry in the year 2000. She believes Education is crucial for every child growing.  It is most important tool to change one’s life. It improves one’s knowledge, skills and develops the personality and attitude. To simplify learning and empower every student to unleash their maximum potential, she founded “Books for everyone”. It is one of the top most publisher house in education and publishing industry. They not only publish books for all the leading boards like CBSE, ISC, ICSE etc. but also books for competitive exams like JEE, NEET, CAT etc. The books are offered to the market on some value for sale and there are large number of consumers for the product who are scattered over a wide geographical area. The books so published needs to be distributed all over the India. For this, she needs to first contact selling agents or brokers who connect them with wholesalers and then finally to the retailers. In spite of putting all her efforts in the business, she realizes that the business was not growing that much as she expected. The sales and profits figure started declining. She decided to speak to her marketing department. The marketing manager after doing analysis, found that we are lacking in promoting the product.  They need to choose a proper promotional tool through which a large number of people can be reached over a vast geographical area. Ms. Neeta was also open to any suggestions and feedback from students and teachers so that she can improve upon and increase the sales of the books. She wants to sell the best content in the book as she knows that a product will be purchased only if it is perceived to be giving greatest benefit or value for the money.

Which of the following channel of distribution is followed by Ms. Neeta in the above case?
(a) Manufacturer-Retailer-Consumer
(b) Manufacturer-Wholesaler-Retailer-Consumer
(c) Direct channel 
(d) Manufacturer-Agent-Wholesaler-Retailer-Consumer

Correct Answer is Option (d)
In this channel, manufactures use their own selling agents or brokers who connect them with wholesalers and then the retailers. It is done particularly when the manufacturer carries a limited product line and has to cover a wide market. An agent in each major area is appointed, who in turn contact the wholesalers.

Q.51: Read the following text and answer question on the basis of the same.
Ms. Neeta Deshmukh, began her journey in the publishing industry in the year 2000. She believes Education is crucial for every child growing.  It is most important tool to change one’s life. It improves one’s knowledge, skills and develops the personality and attitude. To simplify learning and empower every student to unleash their maximum potential, she founded “Books for everyone”. It is one of the top most publisher house in education and publishing industry. They not only publish books for all the leading boards like CBSE, ISC, ICSE etc. but also books for competitive exams like JEE, NEET, CAT etc. The books are offered to the market on some value for sale and there are large number of consumers for the product who are scattered over a wide geographical area. The books so published needs to be distributed all over the India. For this, she needs to first contact selling agents or brokers who connect them with wholesalers and then finally to the retailers. In spite of putting all her efforts in the business, she realizes that the business was not growing that much as she expected. The sales and profits figure started declining. She decided to speak to her marketing department. The marketing manager after doing analysis, found that we are lacking in promoting the product.  They need to choose a proper promotional tool through which a large number of people can be reached over a vast geographical area. Ms. Neeta was also open to any suggestions and feedback from students and teachers so that she can improve upon and increase the sales of the books. She wants to sell the best content in the book as she knows that a product will be purchased only if it is perceived to be giving greatest benefit or value for the money.

Which of the following promotional tool is suitable to reach people over a vast geographical area?
(a) Advertising
(b) Personal Selling
(c) Sales Promotion
(d) Publicity

Correct Answer is Option (a)
Advertising is a medium through which a large number of people can be reached over a vast geographical area. For example, an advertisement message placed in a national daily reaches lakh of its subscribers.

Q.52: Read the following text and answer question on the basis of the same.
Ms. Neeta Deshmukh, began her journey in the publishing industry in the year 2000. She believes Education is crucial for every child growing.  It is most important tool to change one’s life. It improves one’s knowledge, skills and develops the personality and attitude. To simplify learning and empower every student to unleash their maximum potential, she founded “Books for everyone”. It is one of the top most publisher house in education and publishing industry. They not only publish books for all the leading boards like CBSE, ISC, ICSE etc. but also books for competitive exams like JEE, NEET, CAT etc. The books are offered to the market on some value for sale and there are large number of consumers for the product who are scattered over a wide geographical area. The books so published needs to be distributed all over the India. For this, she needs to first contact selling agents or brokers who connect them with wholesalers and then finally to the retailers. In spite of putting all her efforts in the business, she realizes that the business was not growing that much as she expected. The sales and profits figure started declining. She decided to speak to her marketing department. The marketing manager after doing analysis, found that we are lacking in promoting the product.  They need to choose a proper promotional tool through which a large number of people can be reached over a vast geographical area. Ms. Neeta was also open to any suggestions and feedback from students and teachers so that she can improve upon and increase the sales of the books. She wants to sell the best content in the book as she knows that a product will be purchased only if it is perceived to be giving greatest benefit or value for the money.

Which of the following element of marketing mix is much needed in the above case as suggested by the marketing manager?
(a) Product
(b) Price
(c) Promotion
(d) Place

Correct Answer is Option (c)
Promotion is an important element of marketing mix by which marketers makes use of various tools of communication to encourage exchange of goods and services in the market. A company may produce a good quality product, price it appropriately and make it available at the selling points, which are convenient to customers. But in spite of all this, the product may not sell well in the market. There is a need for developing proper communication with the market.

Q.53: Read the following text and answer question on the basis of the same.
Ms. Neeta Deshmukh, began her journey in the publishing industry in the year 2000. She believes Education is crucial for every child growing.  It is most important tool to change one’s life. It improves one’s knowledge, skills and develops the personality and attitude. To simplify learning and empower every student to unleash their maximum potential, she founded “Books for everyone”. It is one of the top most publisher house in education and publishing industry. They not only publish books for all the leading boards like CBSE, ISC, ICSE etc. but also books for competitive exams like JEE, NEET, CAT etc. The books are offered to the market on some value for sale and there are large number of consumers for the product who are scattered over a wide geographical area. The books so published needs to be distributed all over the India. For this, she needs to first contact selling agents or brokers who connect them with wholesalers and then finally to the retailers. In spite of putting all her efforts in the business, she realizes that the business was not growing that much as she expected. The sales and profits figure started declining. She decided to speak to her marketing department. The marketing manager after doing analysis, found that we are lacking in promoting the product.  They need to choose a proper promotional tool through which a large number of people can be reached over a vast geographical area. Ms. Neeta was also open to any suggestions and feedback from students and teachers so that she can improve upon and increase the sales of the books. She wants to sell the best content in the book as she knows that a product will be purchased only if it is perceived to be giving greatest benefit or value for the money.

“Ms. Neeta was also open to any suggestions and feedback from students and teachers so that she can improve upon and increase the sales of the books.” Which function of marketing is described in these lines?
(a) Standardisation and Grading
(b) Packaging and Labelling
(c) Customer Support Services 
(d) Physical Distribution

Correct Answer is Option (c)
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. Customer support services are very effective in bringing repeat sales from the customers and developing brand loyalty for a product.

Q.54: Read the following text and answer question on the basis of the same.
Ms. Neeta Deshmukh, began her journey in the publishing industry in the year 2000. She believes Education is crucial for every child growing.  It is most important tool to change one’s life. It improves one’s knowledge, skills and develops the personality and attitude. To simplify learning and empower every student to unleash their maximum potential, she founded “Books for everyone”. It is one of the top most publisher house in education and publishing industry. They not only publish books for all the leading boards like CBSE, ISC, ICSE etc. but also books for competitive exams like JEE, NEET, CAT etc. The books are offered to the market on some value for sale and there are large number of consumers for the product who are scattered over a wide geographical area. The books so published needs to be distributed all over the India. For this, she needs to first contact selling agents or brokers who connect them with wholesalers and then finally to the retailers. In spite of putting all her efforts in the business, she realizes that the business was not growing that much as she expected. The sales and profits figure started declining. She decided to speak to her marketing department. The marketing manager after doing analysis, found that we are lacking in promoting the product.  They need to choose a proper promotional tool through which a large number of people can be reached over a vast geographical area. Ms. Neeta was also open to any suggestions and feedback from students and teachers so that she can improve upon and increase the sales of the books. She wants to sell the best content in the book as she knows that a product will be purchased only if it is perceived to be giving greatest benefit or value for the money.

“She wants to sell the best content in the book as she knows that a product will be purchased only if it is perceived to be giving greatest benefit or value for the money.” Which feature of marketing is described in these lines?
(a) Needs and Wants
(b) Creating a Market Offering
(c) Customer Value
(d) Exchange Mechanism

Correct Answer is Option (c)
The process of marketing facilitates exchange of products and services between the buyers and the sellers. The buyers, however, make buying decisions on their perceptions of the value of the product or service in satisfying their need, in relation to its cost. A product will be purchased only if it is perceived to be giving greatest benefit or value for the money. The job of a marketer, therefore, is to add to the value of the product so that the customers prefer it in relation to the competing products and decide to purchase it.

Q.55: The ‘Occasion planners’ is an event management company. They organize mostly marriages as they believe that marriage is a relationship that unites two souls. The different functions of marriages are organized by the people who are specialized in their own jobs. They always appoint specialized people in their company as it leads to a systematic allocation of jobs amongst the work force and reduces the workload as well as enhances productivity.
Identify the importance of organizing highlighted in the above text?
(a) Benefits of specialization
(b) Optimum utilization of resources
(c) Adaptation to change
(d) None of these

Correct Answer is Option (a)
Organising leads to a systematic allocation of jobs amongst the work force. This reduces the workload as well as enhances productivity because of the specific workers performing a specific job on a regular basis. Repetitive performance of a particular task allows a worker to gain experience in that area and leads to specialisation.

Q.56: In order to make the ‘Annual Day’ of the school a successful event, the Headmistress of the school segregated all the activities into task groups each one dealing with a specific area. For instance, decorations, refreshments, backstage support, etc. Each group was put under the charge of one teacher. Identify the function of management performed by the Headmistress by dividing the activities and assigning the duties?
(a) Planning 
(b) Organising 
(c) Staffing 
(d) Directing 

Correct Answer is Option (b)
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: Meena, a proof reader in Akash Publications, has been given a target of reading at least 40 pages per day. She has a habit of doing things differently. While doing her work, an idea struck her that a summary of a chapter in the form of a map where all the concepts related to that chapter would be interlinked, should be given in starting of each chapter. It will give students a gist of chapter as well as provide a competitive edge over other publishers. But instead of appreciating her idea, her immediate boss scolded her and asked her to complete the work as per prescribed format. Identify the limitation of planning stated in above paragraph:
(a) Planning reduces creativity. 
(b) Planning involves huge cost. 
(c) Planning is a time-consuming process. 
(d) Planning does not work in dynamic environment. 

Correct Answer is Option (a)
Planning reduces creativity. 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.58: “The health and fitness trend have become popular among large number of urban dwellers. This has created a demand for products like organic food, diet soft drinks, gyms, bottled (mineral) water and food supplements. This trend has, however, harmed business in other industries like dairy processing, tobacco and liquor”.
Which of the following dimensions of business environment is discussed in the above text?
(a) Social 
(b) Political 
(c) Legal 
(d) None of these

Correct Answer is Option (a)
The social environment of business includes social factors like customs, traditions, values, beliefs, poverty, literacy, life expectancy rate etc. The social structure and the values that a society cherishes have a considerable influence on the functioning of business firms. Social trends present various opportunities and threats to business enterprises.

Q.59: “Normally in a plant, work takes place in three shifts of eight hours each. Even in a single shift a worker has to be given some rest interval to take her/his lunch etc. If the work involves heavy manual labour then small pauses have to be frequently given to the worker so that she/he can recharge her/his energy level for optimum contribution”. Identify the technique of scientific study mentioned in the above text.
(a) Time Study
(b) Fatigue study
(c) Motion study
(d) Method study

Correct Answer is Option (b)
A person is bound to feel tired physically and mentally if she/ he does not rest while working. The rest intervals will help one to regain stamina and work again with the same capacity. This will result in increased productivity. Fatigue study seeks to determine the amount and frequency of rest intervals in completing a task.

Q.60: Ms. Sonia is vice principal of one of the reputed international school. She has never encouraged her staff members to develop and carry out their plans for improvements and welfare of the school. She has also never accepted any suggestions from her employees as she believes that taking suggestions is a waste of time. Which principle of management is violated by Ms. Sonia in the above case?
(a) Initiative 
(b) Order 
(c) Equity 
(d) Scalar chain 

Correct Answer is Option (a)
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. A good company should have an employee suggestion system whereby initiative/ suggestions which result in substantial cost/time reduction should be rewarded.