CBSE Class 12th Business Studies Sample Paper - SP3

Free Business Studies - Class 12th (CBSE) - Sample Paper - SP3

Here are the quick details:

• Class: XII
• Subject: BUSINESS STUDIES
• Time: 3 Hours
• Maximum Marks: 80

CBSE Class 12th Business Studies Question Paper

General instructions:

• This question paper contains 34 questions.
• Marks are indicated against each question.
• Answers should be brief and to the point.
• Answers to the questions carrying 3 marks may be from 50 to 75 words.
• Answers to the questions carrying 4 marks may be about 150 words.
• Answers to the questions carrying 6 marks may be about 200 words.
• Attempt all parts of the questions together.

Q1. A person feeling hungry may get food by offering to give money or some other product or service in return to someone willing to accept the same for food. The important feature of marketing illustrated above is: (1 Mark)

1. Exchange mechanism
2. Customer value
3. Creating a market offering
4. Needs and wants

Q2. Mohammad Banjwa, a bee-keeper since April 2021, is now part of the growing tribe of at least 50 urban dwellers in Maharashtra raising bees and harvesting honey in their balconies, terraces and backgardens. As he had been focused on eating right, the thought of consuming honey bees to promote health, communication habits and using honey being cultivated right before his eyes was mesmerising for him. Identify the factor constituting the general environment being discussed above. (1 Mark)

1. Economic environment
2. Social environment
3. Technological environment
4. Political environment

Q3. The marketing mix involves several key elements that work together to effectively market a product or service. What is the correct order of these elements? (1 Mark)

1. Product, Promotion, Place, Price
2. Promotion, Price, Product, Place
3. Price, Product, Place, Promotion
4. Product, Price, Place, Promotion

Q4. Identify the factor which does not affect the working capital.

1. Diversification
2. Scale of operations
3. Choice of technique
4. Raw Material

Q5. 'Kanand Ltd.' is an Automobile manufacturing company started in 2014 under the 'Make in India' initiative of the Government of India. Expecting higher growth in future, it developed a higher capacity in the current year, taking advantage of the subsidies provided by the government. They would enable 'Kanand Ltd.' to meet the anticipated higher demand quickly. This led 'Kanand Ltd.' to invest large amounts in fixed assets, leading to higher requirements of fixed capital by their firm and affecting fixed capital requirements, which 'Kanand Ltd.' kept in mind to meet the higher anticipated demand quickly. (1 Mark)

1. Scale of operations
2. Nature of business
3. Diversification
4. Growth prospects

Q6. 'Airlink' will be able to offer the benefit of lower pricing to customers on comparative routes due to the decision of the Civil Aviation Ministry to remove price caps from 31 August 2022. This can help an airline to perform better if they make early decisions regarding the best course of action after undertaking good doing analysis. Which important steps of the business environment and its understanding by managers is not highlighted above? (1 Mark)

1. It helps in improving performance.
2. It helps in assisting in planning and policy formulation.
3. It helps in tapping useful resources.
4. It enables a firm to identify opportunities and get a first-mover advantage.

Q7.  Read the following statements: Assertion (A) and Reason (R). Choose the correct alternative from those given below. (1 Mark)

• Assertion (A): Controlling is a management function that ensures organisational goals are achieved by monitoring performance and making necessary adjustments.
• Reason (R): Planning and Controlling are interrelated functions, where planning sets the standards for performance and controlling ensures that these standards are met by comparing actual performance with planned performance.

1. Both Assertion (A) and Reason (R) are true, and Reason (R) is the correct explanation of the Assertion (A).
2. Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of the Assertion (A).
3. Assertion (A) is true, but Reason (R) is false.
4. Assertion (A) is false, but Reason (R) is true.

Q8. Which of the following is the function of 'Top-level management'? (1 Mark)

1. They ensure that their department has the necessary personnel.
2. They interact with the actual workforce and pass on instructions from the middle management to the workers.
3. They co-operate with other departments for the smooth functioning of the organisation.
4. They analyse the business environment and its implications for the survival of the firm.

Q9. 'ENERGISE' successfully addressed declining soft drink demand by launching the tea brand ‘SFUR-TEA’ and the wellness drink ‘FORTY PLUS,’ which were well-received by consumers. Identify the feature of management reflected in the above paragraph. (1 Mark)

1. Management is intangible.
2. Management is a group activity.
3. Management is a dynamic function.
4. Management is multi-dimensional.

Q10. Which statement is an incorrect statement with respect to the limitation of planning?

1. Rigidity can limit flexibility and adaptability in management.
2. Planning creativity may occur when strict procedures and productivity.
3. Time-consuming processes can slow down efficiency within an organisation.
4. Plans themselves can drive progress and improvement.

Q11. Manish found dust and small stones in the newly opened red chilli powder spice pack manufactured by a reputed company, Masala Mantra Ltd. She went back to the shopkeeper from whom the pack was purchased, who directed her to call up the customer care centre. When all her efforts were in vain, she went to a consumer activist group to seek advice. The group decided to help her and take measures to impose restrictions on the sales of the firm’s products of the particular batch and urge customers to refrain from buying the products of the company. Masala Mantra lost its image in the market. The Board of Directors gave the responsibility of bringing back the lost image of the company to the General Manager. Which of the following concepts of marketing management will help the General Manager to get the firm out of the above crisis? (1 Mark)

1. Advertising
2. Sales promotion
3. Public relations
4. Personal selling

Q12. Identify from the following which is an item that is represented by the picture of the refrigerator given.

1. Brand name
2. Trademark
3. Label
4. Brand mark

Q13. Match the technique of sales promotion in Column I with its example in Column II. (1 Mark)

Column I	Column II
(a) Rebate	(1) 5% off on the packet of chips
(b) Discount	(2) Buy 2 get one free
(c) Coupon	(3) Buy just at ₹100
(d) Quantity Gift	(4) Buy goods worth ₹1,000 and get a coupon for a 15% discount on your next purchase

1. (a)-(4), (b)-(5), (c)-(1), (d)-(3)
2. (a)-(4), (b)-(2), (c)-(3), (d)-(4)
3. (a)-(4), (b)-(5), (c)-(2), (d)-(1)
4. (a)-(4), (b)-(5), (c)-(3), (d)-(1)

Q14. Identify the concept that refers to the number of subordinates that can be effectively managed by a superior in an organisation. (1 Mark)

1. Span of management
2. Organisation structure
3. Delegation of authority
4. Hierarchy of authority

Q15. What are the characteristics of management? (1 Mark)

1. Goal-Oriented
2. Marketing
3. Universal Application
4. Static in Nature
5. Integrated Function
6. Resouce-Centric

Choose the correct alternatives from the following:

1. a,b, and c
2. b, d, and f
3. a, c, and e
4. d, e, and f

Q16. Read the following statements carefully: (1 Mark)

• Statement I: The production concept of the marketing philosophy applies to convenience products.
• Statement II: The production concept of the marketing philosophy applies to specialty products.

Choose the correct alternative from the following:

1. Statement I is correct, and Statement II is wrong.
2. Statement II is correct, and Statement I is wrong.
3. Both statements are correct.
4. Both statements are wrong.

Q17. M/s J.K. Computers’ is a small organisation engaged in assembling computers. In this organisation, decision-making rests with top management while the middle level is involved in implementing plans. On the other hand, Progressive Computers Ltd. is a large organisation with several people from each level involved in the decision-making process. The application of the principle of ‘Centralisation and Decentralisation’ is different in the two organisations, as each employee’s situation is different. Choose the correct point of the nature of the principles of management highlighted above. (1 Mark)

1. Mainly behavioural
2. Dynamic
3. General guidelines
4. Flexible

Q18. The activities involved in managing the enterprise are common to all organisations, whether economic, political, or social. Identify the feature of management: (1 Mark)

1. Management is multidimensional.
2. Management is a continuous process.
3. Management is a dynamic function.
4. Management is an all-pervasive function.

Q19. Hand-woven carpets are banned in some European countries because they think there can be involvement of child labour in the manufacturing of these carpets. Products produced through the involvement of child labour are banned in these countries. Identify the dimensions of the business environment stated above. (1 Mark)

1. Legal environment
2. Political environment
3. Social environment
4. Economic environment

Q20. Pioneer Ltd. is dealing in fruit juices and hair oils. To ensure unity of action and coordination, it has made two separate divisions for each product. Each division has its own in-charge, plans and execution resources. Thus, both divisions are moving towards the same objectives through focused efforts. Identify the principle of management followed by Pioneer Ltd. in the above case.

1. Esprit de corps
2. Equity
3. Unity of direction
4. Authority and responsibility

Q21. Explain the following as types of plans: 

1. Procedure
2. Rule

OR

State the next three steps in the process of planning which the manager will have to follow after using conjecture about what might happen in the future.

Q22. ‘Cortico Fabrics’ was started by Ashish in 2001 to sell bed sheets, towels, comforters, pillows, cushions, bath mats, etc. It is now a famous name, and its branches are across India. To manage the work all over India, it has eight teams, two each for North, South, East and West India. Ashish spends a considerable amount of time developing an orderly pattern of group efforts among different teams and securing unity of action in pursuit of a common purpose. To ensure suitable allocation of tasks to the various members of the teams and to see that the tasks are performed with harmony among the members, he tries to balance the different teams at different locations.

1. Identify and explain the concept of management discussed in the above paragraph.
2. Also, explain any one point of importance of the concept identified in (a) above.

Q23. From the following information regarding XYZ Ltd., which is in the business of manufacturing electronics, calculate the Interest Coverage Ratio (ICR) and Debt-to-Equity Ratio of the company: (Show working)

• Earnings Before Interest and Tax (EBIT): ₹ 20,00,000
• 8% Debentures: ₹ 15,00,000
• Equity Share Capital (₹ 10 each): ₹ 25,00,000
• Tax Rate: 30%

Q24. Determining the relative proportion of various types of funds depends on various factors. Explain any three such factors.

OR

Explain the twin objectives of financial planning.

Q25. A Business Process Outsourcing centre, ‘Chromosome’, which deals in the conversion of voice reports dictated by physicians and other healthcare providers into text format, has 40 employees. They ensure that their employees are well-versed in at least one foreign language and one Indian language. The employees are given the required training to ensure that the reports are processed correctly, as they are the backbone of the patients’ medical history. On frequent complaints about some of its employees, it was observed that they were facing problems in decoding the message, as they were not very proficient in the language in which the voice message was received. As a result, they would make mistakes, causing different meanings to the message. Not only this, but sometimes there were technical words used in voice reports, the actual meaning of which was also not understood by the employees. Due to this, ‘Chromosome’ was slowly losing its business to competitors. The above case highlights two communication barriers. Identify and explain these barriers.

Q26. “It is generally believed that measurement of performance should be done after the task is completed.” Identify and explain the step in the process of the function of management being discussed above, and the step followed by the same in the process.

OR

“Critical point control and management by exception are key techniques in the controlling process.” Explain any significance that supports this statement.

Q27. 

1. Explain the following functions of marketing:
• Product Design and Development.
• Standardisation and grading
2. Explain the four important elements of the marketing mix.

Q28. The barriers to effective communication exist in all organisations to a greater or lesser degree. State measures to overcome these barriers.

OR

Explain the importance of motivation in the directing process of management. How does it impact employee performance and organisational effectiveness?

Q29. Saksham Ltd., a firm manufacturing textiles, wished to diversify its business. They were considering two options: either to diversify into manufacturing toothpaste or switches. They wanted to invest in the purchase of land, to set up a manufacturing unit in the backward areas of Gujarat, which would also lead to the generation of employment opportunities in the area, but only after fulfilling all legal requirements and taking appropriate steps to ensure that the environment was not polluted. The Finance Manager of the company, Mr Ramakant, was asked by the management to prepare a report on the factors which should be considered while making the above investment decision.

1. State any two factors that Mr Ramakant would give in his report.
2. Also state any two reasons which make it important for the above decisions to be made carefully.

Q30. In Saarthak Steel, several initiatives have been taken to further improve the motivation levels of employees through designing jobs that include a greater variety of work content, providing certain stability about future income and work, providing fringe benefits like housing, medical aid, etc., and allotment of shares in line with various incentives. Identify and briefly explain the incentives being given by the organisation to the employees.

Q31. “Every Card Ltd.” is a greeting card-making company which is flourishing well. There is a card for everyone and every occasion. During the time of Christmas and New Year, the production and selling of cards reach a new high as the company originates from Europe. The company exists in an environment which is democratic, and there are rules for every business firm. Outside the company, there are customers, competitors, government authorities and almost everything one can think of. The company appears to have a promising future. However, the firm will have to understand the close relationship between various elements of the business environment around it. In the context of the case, identify and explain the features of the business environment which are mentioned here.

Q32. Explain any four importance of organising in management.

OR

Explain any four dimensions of the business environment.

Q33. 

1. Explain the following factors affecting the working capital requirements of a business:
• Operating efficiency
• Credit availed
• Level of competition
2. Explain the following factors of the dividend decision of a company:
• Stability of dividends
• Contractual constraints
• Stock market

Q34. The G20 Summit was organised in India. The government left no stone unturned to make the G20 summit a success. At the higher level, the work to be performed was identified and grouped to enable people to work most effectively together to accomplish objectives. This involved building infrastructure, beautification of the city, hospitality, security arrangements etc. Duties were assigned to different job positions, which led to the establishment of clear relationships. This helped in creating a hierarchical structure and in coordination amongst all working for the summit.

1. Identify and explain the function of management discussed in the above paragraph.
2. Explain any four points of importance of the function identified in (a) above.

The End

Follow the links below to perform more sample papers:

• Sample Paper
• Sample Paper

CBSE Class 12th Business Studies Revision Notes - N10

Free Business Studies - Class 12th (CBSE) - Revision Notes - N10 - Financial Markets

Financial Markets

• A Financial Market is a market for the creation and exchange of financial assets.
• An economic system consists of two main sectors - households which save funds and business firms which invest these funds.
• A financial market helps to link the savers and the investors by mobilizing/Moving funds between them. (Allocative Function)
• It allocates or directs funds available for investment into their most productive investment opportunity. The process by which the allocation of funds is done is called financial intermediation.
• Financial markets exist wherever a financial transaction occurs.
• Financial transactions could be in the form of creation of financial assets such as the initial issue of shares and debentures by a firm or the exchange of existing financial assets like equity shares, debentures and bonds.

Functions of the Financial Markets

1. Allocative function  A financial market facilitates the transfer of savings from savers to investors. It gives savers the choice of different investments and thus helps to channelize surplus funds into the most productive use.
2. Facilitating Price Discovery In the financial market, households are suppliers of funds and business firms represent the demand. The interaction between the forces of demand and supply helps to establish a price for a financial asset being traded in the financial market.
3. Providing Liquidity to Financial Assets Financial markets facilitate easy purchase and sale of financial assets. Holders of assets can readily sell their financial assets through the mechanism of the financial market.
4. Reducing the Cost of Transactions Financial markets provide valuable information about securities being traded in the market. It helps to save time, effort and money that both buyers and sellers of a financial asset would have to otherwise spend to try and find each other. The financial market is thus a common platform where buyers and sellers can meet for the fulfilment of their individual needs.

Types of Financial Markets

Money Market

• Money market is a market for short-term funds which deals in assets whose period of maturity is up to one year. It enables the raising of funds for meeting the temporary shortages of cash and obligations and the temporary deployment/usage of excess funds for earning returns.
• A money market is a market where low-risk, unsecured and short-term debt instruments that are highly liquid are issued and actively traded every day. It has no physical location, but is an activity conducted over the telephone and through the Internet.
• Major Participants in the Money Market are:

1. The Reserve Bank of India (RBI)
2. Non-Banking Finance Companies
3. Large Corporate Houses
4. Commercial Banks
5. State Governments
6. Mutual Funds

• Instruments of Money Market are:

1. Treasury Bill
2. Commercial Paper
3. Certificate of Deposit

Capital Market

• Capital market refers to institutional arrangements through which medium and long-term funds, both debt and equity are raised and invested.
• It does not deal with channelizing savings for less than one year.
• The capital market transfers money from savers to entrepreneurial borrowers/business.
• The capital market makes use of different intermediaries such as brokers, underwriters, depositories etc. These intermediaries act as working organs of the capital market and are very important elements of the capital market.

Differences Between the Money Market and The Capital Market

Types of Capital Market

Primary Market (New Issue Market)

• It deals with new securities being issued for the first time.
• Primary capital market directly contributes to capital formation because in primary market company goes directly to investors and utilizes these funds for investment in buildings, plants, machinery etc.
• Method of Flotation of Securities in Primary Market

1. Public Issue Through Prospectus
2. Offer for Sale
3. e-IPOs (Electronic Initial Public Offer)

Secondary Market (Stock Exchange)

• The Secondary market is the market for the sale and purchase of previously issued or existing securities.
• Under this market, the securities are not directly issued by the company to investors.
• The securities are sold by existing investors to other investors.
• Sometimes the investor needs cash, and another investor wants to buy the shares of the company as he could not get it directly from the company.
• Then both investors can meet in the secondary market and exchange securities for cash through an intermediary called a broker.

Differences between Primary Market & Secondary Market

Stock Exchange

Stock exchange is defined as an organization constituted for the purpose of assisting, regulating/controlling of business of buying, selling and dealing in securities.

Functions of Stock Exchange/Secondary Market

1. Safety of Transactions - In the stock market, only the listed Securities are traded.
2. Contributes to Economic Growth - In the stock exchange, existing securities of various companies are bought and sold. This process of disinvestment and reinvestment helps to invest in the most productive investment proposal, and this leads to economic growth.
3. Spreading of Equity Cult - Stock exchange encourages people to invest in Equity by better trading practices and educating the public about investment.
4. Promotes the Habits of Savings and Investment - The Stock market encourages people to save more and invest in securities rather than investing in gold, silver, etc.
5. Pricing of Securities - Share prices on a ‘Stock Exchange’ are determined by the forces of demand and supply. A stock exchange is a mechanism of constant valuation and it provides instant information to both buyers and sellers in the market.

Steps in the Trading Procedure on a Stock Exchange

1. Selection of the Broker
2. Opening a DEMAT account
3. Placing an Order
4. Match the Share and Best Price
5. Executing the Order
6. Issue of Contract Note
7. Delivery of Shares and Making Payments
8. Settlement

1. Selection of the Broker - The buying and selling of securities can only be done through SEBI-registered brokers who are members of the stock exchange. The broker can be an individual, partnership firm or corporate bodies.
2. Opening a DEMAT account - The broker opens a trading account in the name of the investor after taking details such as PAN number; Date of birth and address; Educational qualification and occupation; Residential status; Bank account details; Name of any other broker with whom registered.
3. Placing an Order -The order can be placed with the broker either personally or through phone, email, etc. The Investor must place the order very clearly specifying the range of prices at which securities can be bought or sold.
4. Match the Share and Best Price - The broker will then go online and connect to the stock exchange and match the share and best price available.
5. Executing the Order - When the shares can be bought and sold at the price mentioned, it will be communicated to the broker terminal, and the order will be executed electronically. The broker will issue a trade confirmation slip to the investor.
6. Issue of Contract Note - After the trade has been executed the broker issues the contract note within 24 hours. This note is an important legal document as it helps to settle disputes or claims between investors and the broker and contains the details like No. of shares bought and sold, price, date, time of the deal, brokerage charges.
7. Delivery of Shares and Making Payments - Now the investor must deliver the shares sold or pay cash for the shares bought to the broker. This should be done immediately after receiving a contract note. This is called pay-in-day.
8. Settlement - Cash is paid or securities are delivered to the stock exchange by the broker on pay-in-day, the stock exchange will deliver the shares or make payment to the other broker. This is called pay-out day. The broker must make payment to the investor within 24 hours of the pay-out day. The broker can make delivery of shares in Demat form directly to the investor's Demat Account.

  Depositories

• A depository is an institution or an organisation which holds securities.
• At present in India, there are two depositories a) NSDL (National Securities Depository Ltd.) b) CDSL (Central Depository Services Ltd.) Ø There is no direct contact between the depository Depositories National Securities Depository Ltd. Central Depository Services Ltd. Investor and the investor. The depository interacts with investors through depository participants only.

Dematerialization

• Dematerialisation refers to holding securities in electronic form. For this purpose, the investor must open a Demat Account and SEBI has now made it mandatory to trade in Demat Form.
• Holding shares in Demat form is very convenient as it is just like a bank account.
• Various securities of different companies can be held in a single Demat account.
• This is mainly done to eliminate problems associated with share certificates like theft, fake transfers etc.

SEBI (Securities Exchange Board of India)

• SEBI was set up in 1988 to regulate the functions of the securities market.
• With the growth in the dealing with stock markets, lots of malpractices also started in the stock markets Such as price rigging, unofficial premium on new issue, delay in delivery of shares, violation of rules and regulations of the stock exchange.
• Due to these malpractices, customers started to lose confidence and faith in the stock exchange. Hence the government of India decided to set up an agency to protect the interest of investors.

      Objectives of SEBI  

•        To develop a code of conduct for intermediaries like brokers. 
•        To regulate stock exchanges. 
•        To protect the rights and interests of investors

Functions of SEBI

Protective Functions are performed by SEBI to protect the interest of investor and provide safety of investment.

a) Check a Price Rigging: Price rigging refers to manipulating the prices of securities with the main objective of inflating or depressing the market price of securities. SEBI prohibits such practices because this can defraud and cheat the investors.

b) It Prohibits Insider Trading: An insider is any person connected with the company such as Directors, Promoters etc. These insiders have sensitive information which affects the prices of securities.

c) SEBI Prohibits Fraudulent and Unfair Trade Practices: SEBI does not allow the companies to make misleading statements which are likely to induce the sale or purchase of securities.

d) SEBI Spreads Awareness by Educating Investors: SEBI undertakes steps to educate investors so that they can evaluate the securities of various companies and select the most profitable Securities.

 

     Developmental functions are performed by SEBI to promote and develop activity in the stock exchange.

a) SEBI promotes training of intermediaries of the securities market .

b) SEBI has permitted internet trading through registered stockbrokers.

Regulatory functions are performed to regulate the Stock exchange.

a) SEBI has framed rules and regulations and a code of conduct to regulate the intermediaries such as bankers, brokers, underwriters etc.

b) SEBI registers and regulates the working of stockbrokers, sub-brokers, share transfer agents, and all others who are associated with the stock exchange in any manner.

c) SEBI regulates takeover of the companies.

d) SEBI conduct inspections and audit of the stock exchange.

e) SEBI registers and regulates the working of mutual funds etc. 

The End

Have you finished the entire revision of the notes? Do you want to learn more? Below are the revision notes for the following:

• Marketing Management
• Financial Management
• Organising
• Consumer Protection

Mexico Imposing 50% Tariff on Asian Countries: Explained

Mexico's 50% Tariff on Asian Countries: A Complete Guide

First, it was America, and now Mexico is imposing 50% tariffs on Asian countries like India, China, and South Korea from 2026.

As every government wants to protect its local markets, the Mexican government has imposed these tariffs at a higher rate to:

• Make Asian goods more expensive in Mexico (local market)
• Protect Mexican factories (local manufacturing hubs) from international competition
• Generate more tax income for the Mexican government

You might be curious to know the complete story behind it, so let’s unravel it in our blog.

Quick Navigation

• What Did Mexico Do?
• Real-World Examples
• Learning for Students
• Quick Summary

💡 Tip: A tariff is a tax that a country charges when goods enter from another country. Think of it like a fee or entry tax at the border.

What Did Mexico Do?

• Mexico’s lawmakers have approved new import tariffs (taxes paid at the border) on more than 1,400 products coming from Asian countries.
• These tariffs are applicable to those countries that do not have a free trade agreement with Mexico.
• The tariffs range from 5% to 50%.
• The affected items will be from Asian regions:
• Cars
• Auto parts 
• Textiles
• Clothing
• Plastics
• Steel
• Footwear
• Electronics​

How Much Revenue Will be Collected?

Mexico’s finance ministry estimates these tariffs will bring in about 52 billion pesos (around 2.8–3.8 billion US dollars) in extra revenue in 2026.

Explaining the Situation with Real-World Examples

Example 1: Indian Cars in Mexico

Before the tariff:

• Hyundai exports a car from India to Mexico for $15,000
• Mexican customer pays $15,000
• Profit goes to the company

After the 50% tariff:

• Same car now has a 50% tax added = $7,500 extra cost
• Mexican customer must pay $22,500 (or the company loses $7,500 in profit)
• Result: Fewer people buy Indian cars → Indian companies lose business

Aspect	Before Tariff	After Tariff
Car Price	$15,000	$15,000
Tariff (Tax)	$0	$7,500 (50%)
Total Price	$15,000	$22,500
Customer Impact	Affordable	More Expensive
Company Impact	More Sales	Fewer Sales

​

Example 2: Electronic Parts from India

An Indian company ships electronic components worth $100,000 to Mexico.

Stage	Amount
Original value	$100,000
Tariff at 30%	$30,000
Total cost for buyer	$130,000

Now Mexican factories have to pay 30% extra, so they either reduce profit or increase the final product price.

---

Learning for Students

According to Business Studies:

Mexico is using protectionism. It means protecting its own companies from foreign competitors by making foreign goods expensive.

​For Companies:

• Indian exporters lose customers to Mexican competitors
• Mexican companies get breathing room to sell more
• Some companies may decide to set up factories in Mexico instead of exporting

Who Benefits	Who Loses
Mexican car makers	Indian car makers
Mexican electronics factories	Indian electronics exporters
Mexican workers	Asian exporters' jobs at risk

According to Economics:

How prices change:

• Imported goods become more expensive
• Mexican goods (that don't have tariffs) look cheaper
• Customers buy more local, less foreign

Supply and Demand:

• Price of foreign goods ↑ (due to tariff)
• Demand for foreign goods ↓
• Demand for Mexican goods ↑

For the government: Mexico earns tax money but may face trade wars if other countries retaliate.​

According to Accountancy:

For an importing company's accounts:

If a company imports goods worth ₹100 from India:

• Cost of Goods = ₹100
• Customs Tariff (50%) = ₹50
• Total Cost in Books = ₹150

When this is sold later, the higher cost reduces profit.

Item	Amount
Sales Revenue	₹200
Cost of Goods (including tariff)	₹150
Gross Profit	₹50 (was ₹100 before tariff)
Loss = 50%	Profit drops by half

Quick Summary

• What: Mexico added 5-50% tax on Asian goods starting 2026
• Why: To protect Mexican businesses and jobs
• Effect: Asian products become expensive; Mexican products become more competitive; profits of exporters drop; customers pay more

The End​

CBSE Class 12th Business Studies Question Paper - TS3 (5 Question Papers)

Free Business Studies - Class 12th (CBSE) - TS3 (5 Question Papers Included) - Business Environment

Here are the quick details:

• Class: XII
• Subject: BUSINESS STUDIES
• Time: 45 minutes
• Maximum Marks: 20
• Chapter Name: Business Environment
• Marking Scheme: One, three, four, and six marks

Below are the links to the tests:

• Test 1
• Test 2 (Coming Soon)
• Test 3 (Coming Soon)
• Test 4 (Coming Soon)
• Test 5 (Coming Soon)

Test 1

• Time: 45 minutes
• Maximum Marks: 20

Q1. __________ is considered a major element of the political environment: (Choose the correct alternative) (1 mark)

1. The extent and nature of government intervention in business
2. Planned outlay in the public and private sectors
3. Expectations from the workforce
4. Administrative order issued by government authorities

Q2. Which of the following is not a component of the economic environment of business? (1 mark)

1. Interest rates 
2. Inflation rates
3. Literacy rates 
4. Rates of savings and investments.

Q3. Identify the dimensions of the business environment illustrated by the picture in which Sapna, who has joined the workforce recently, is working on an accounting software. (1 mark)

1. Technological and social
2. Technological and political
3. Political and economic
4. Social and legal

Q4. 

• Assertion (A): Economic, social, political, legal, and technological conditions are the specific forces of the business environment.
• Reason (R): Economic, social, political, legal, and technological environments have an impact on all business enterprises and thus may affect an individual firm only indirectly. (1 mark)

1. Both Assertion (A) and Reason (R) are true.
2. Both Assertion (A) and Reason (R) are false. 
3. Assertion (A) is true, and Reason (R) is false.
4. Assertion (A) is false, and Reason (R) is true. 

Q5. State any three features of ‘demonetisation’. (3 marks)

Q6. The Government is considering a pioneering proposal to launch a single debit-cum-credit card to increase the ease and use for consumers. The card, which will be called the “National Mobility Card,” will have unique advantages for making payments in metro, buses, parking, and making transactions during visits abroad. After hearing this news, Mega Bank decided to launch a “Mega Mobility Card” on similar lines, so that they could be the first to exploit the opportunity arising due to the increasing trend of digitization. In order to improve their performance, they laid down a plan to hire more people in their marketing department and prepared guidelines to train their sales force to market the new card facility being launched by the bank. By quoting the lines, identify and explain any three points of importance of understanding the Business Environment discussed above. (3 marks)

Q7. National Digital Library of India (NDL India) is a pilot project initiated by the HRD ministry. It works towards developing a framework of a virtual repository of learning resources with a single-window search facility. It provides support to all academic levels, including researchers, life-long learners, and differently abled learners, free of cost. Identify and explain two dimensions of the business environment highlighted above. (4 marks)

Q8. Define business environment. State any five features of the business environment. (6 marks)

The End