How environment is affected by human activities?

Drastically, of course

Think about what It's asking, how does the physical environment (everything around us) impact human activities.

We react to our environments, on this one (earth) we have taken a dominating role of shaping our environment to fit our needs. BUT at the same time our environment still impacts everything about our activities. Just look at the settlement of human cities for an example. Just about every major city in the world is built right along some ocean or waterway (to allow for transport of goods by sea).