1. What is the main aim of business?

A. To earn profit only

B. To produce maximum goods
C. To satisfy the needs of customers
D. To develop technology
ANSWER: C
2. Business must adapt itself to changes in:
A. Products
B. Environment
C. Employees
D. Customers only
ANSWER: B
3. Which of the following affects business operations indirectly and distantly?
A. Micro environment
B. Macro environment
C. Internal environment
D. Supplier network
ANSWER: B
4. Who defined business environment as “the aggregate of all conditions, events and
influences that surround and affect it”?
A. Peter Drucker
B. Keith Davis
C. Philip Kotler
D. Fayol
ANSWER: B
5. Business environment consists of:
A. Only controllable factors
B. Internal policies
C. Complex, dynamic and uncontrollable factors
D. Only legal rules
ANSWER: C
6. Which of the following is an example of macro environment?
A. Supplier
B. Competitor
C. Customer
D. Technological advancement
ANSWER: D
7. Which of the following is not a nature of business environment?
A. Static
B. Inter-related
C. Complex
D. Uncertain
ANSWER: A
8. Internal environment is composed of:
A. Customers and competitors
B. Technology and economy
C. Men, money, material, machine and method
D. Political parties and laws
ANSWER: C
9. Dynamic nature of business environment means:
A. It remains the same over time
B. It changes frequently
C. It is controlled by government
D. It is simple to understand
ANSWER: B
10. The micro environment includes:
A. Technology
B. Political policies
C. Suppliers and customers
D. Climate
ANSWER: C
11. External environment includes all the following except:
A. Competitors
B. Suppliers
C. Employees
D. Government policies
ANSWER: C
12. Which of the following is a specific environment force?
A. Customers
B. Technology
C. Politics
D. Economy
ANSWER: A
13. The political/legal environment is part of:
A. Micro environment
B. Internal environment
C. Specific environment
D. Macro environment
ANSWER: D
14. What provides raw materials and energy to the firm?
A. Political environment
B. Natural environment
C. Technological environment
D. Internal environment
ANSWER: B
15. What is a key factor in the internal environment of a business?
A. Government regulations
B. Human resource quality
C. Taxation system
D. Import-export policy
ANSWER: B
16. Who are considered as part of the public in micro environment?
A. Government
B. Media and pressure groups
C. Suppliers
D. Investors
ANSWER: B
17. Profit is considered as:
A. Cost of business
B. Reward for taking risk
C. A loss margin
D. Taxable value
ANSWER: B
18. Mission and objectives are part of:
A. External environment
B. Corporate culture
C. Internal environment
D. Economic conditions
ANSWER: C
19. What impacts business both in short-term and long-term?
A. Technology only
B. Business environment
C. Suppliers
D. Employees’ attitude
ANSWER: B
20. Why should a business scan its environment?
A. To eliminate competition
B. To avoid production
C. To adapt and survive
D. To increase tax
ANSWER: C
21. Demographic environment refers to:
A. Machinery used
B. Customer satisfaction
C. Population and life expectancy
D. Import-export
ANSWER: C
22. Which is not part of internal environment?
A. Organisation structure
B. Mission
C. Supplier network
D. Value system
ANSWER: C
23. Global environment influences business due to:
A. Closed economy
B. National limitations
C. Globalisation
D. Village-based economy
ANSWER: C
24. Which of these is a part of the controllable environment?
A. Legal rules
B. Employees
C. Government policy
D. Social trends
ANSWER: B
25. Which environment provides opportunities and threats to business?
A. Only internal
B. Only competitors
C. External environment
D. Internal audit
ANSWER: C
26. Business environment is:
A. Entirely stable
B. Always predictable
C. Ever-changing
D. Not related to politics
ANSWER: C
27. Which component is considered uncontrollable?
A. Corporate structure
B. Competitor policies
C. Government laws
D. Raw material management
ANSWER: C
28. Example of inter-dependence in business is:
A. Fixed cost remains same
B. Customer affects production decisions
C. Employees fix price
D. Company avoids technology
ANSWER: B
29. Early warning signals help business to:
A. Increase price
B. Maintain balance sheet
C. Prepare and plan against threat
D. Decrease profits
ANSWER: C
30. Market intermediaries are part of:
A. Macro environment
B. Internal environment
C. Micro environment
D. Natural environment
ANSWER: C
31. A good understanding of business environment helps in:
A. Ignoring global changes
B. Delayed decisions
C. Effective planning
D. Avoiding responsibilities
ANSWER: C
32. Business environment is a mixture of:
A. Fixed and variable costs
B. Internal profits
C. Complex and uncontrollable forces
D. Customer feedback
ANSWER: C
33. The success of business depends on:
A. Internal control alone
B. Adapting to environment
C. Fixing prices
D. Marketing
ANSWER: B
34. Which of the following is a technological factor?
A. Inflation rate
B. Currency fluctuation
C. Internet innovation
D. Population growth
ANSWER: C
35. Who are the buyers of the firm's products?
A. Suppliers
B. Distributors
C. Customers
D. Competitors
ANSWER: C
36. Environmentalists and consumer groups belong to:
A. Internal environment
B. Competitors
C. Public
D. Government
ANSWER: C
37. Internal environment can be:
A. Ignored
B. Controlled and managed
C. Legally regulated
D. Replaced by competitors
ANSWER: B
38. The economic environment includes:
A. Media and newspapers
B. National income and trade cycles
C. Religions and festivals
D. Earthquakes
ANSWER: B
39. A business firm and environment are:
A. Unrelated
B. Opponents
C. Interdependent
D. Mutually exclusive
ANSWER: C
40. Global environment is important because:
A. Firms export only
B. Whole world is a market
C. Government provides subsidy
D. Population increases
ANSWER: B
41. Which is an example of demographic factor?
A. Mission of company
B. Competitor’s pricing
C. Educational level of people
D. Investment decisions
ANSWER: C
42. Suppliers provide:
A. Legal advice
B. Raw materials
C. Tax returns
D. Loans
ANSWER: B
43. Which of the following changes frequently?
A. Technology
B. Mission
C. Structure
D. Resources
ANSWER: A
44. Human resources refer to:
A. Machines and capital
B. Employees’ skills and commitment
C. Bank loans
D. Government audits
ANSWER: B
45. Complexity in business environment arises due to:
A. Lack of competition
B. Many interacting factors
C. Single policy system
D. No changes
ANSWER: B
46. Internal environment helps to:
A. Attract foreign investment
B. Control macroeconomic policies
C. Improve efficiency
D. Reduce taxes
ANSWER: C
47. Specific environment factors have:
A. No influence on business
B. Direct impact
C. Delayed result
D. Purely legal aspects
ANSWER: B
48. Inter-relatedness of environment means:
A. Every factor works independently
B. Factors affect each other
C. Only economic factors matter
D. Policies remain unchanged
ANSWER: B
49. Socio-cultural environment includes:
A. Laws and judiciary
B. Climate and rainfall
C. People's lifestyle and attitude
D. Currency policies
ANSWER: C
50. Which is not a component of macro environment?
A. Competitors
B. Political system
C. Technology
D. Economy
ANSWER: A