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11
Third is the sale of goods and services. Sale is the exchange of a
product or service for money. A car is sold to someone in exchange for
money. Goods are products that people either need or want; for exam-
ple, cars can be classified as goods. Services, on the other hand, are
activities that a person or group performs for another person or organi-
zation. For example, an auto-mechanic performs a service when re-
pairing a car. A doctor also performs a service by taking care of people
when they are sick. So, business is a combination of all these activi-
ties: production, distribution, and sale. Still, there's another important
factor. This factor is the creation of profit or economic surplus. A ma-
jor goal in the functioning of an American business company is mak-
ing a profit. Profit is the money that remains after all the expenses are
paid. Creating an economic surplus or profit is, therefore, a primary
goal of business activity.
IV. COMPREHENSION CHECK
Answer the following questions about the meaning of business.
Questions with asterisk (*) cannot be answered directly from the text.
1. What is one modern definition of business?
2. *How does this modern meaning of business differ from the
traditional one?
3. *What factors have brought about these changes?
4. What does production involve?
5. What example of distribution is given in the reading?
6. *Can you think of another example?
7. How do goods differ from services?
8. In addition to production, distribution, and sale, what other
factor is important in defining business?
9. What is profit?
10. *In general, what do companies do with their profit?
11. Compare your definition of business with the one given in the
reading.
12. *How are they similar?
13. In what ways does your definition differ from the one pre-
sented in the text?
12
V. CLASSIFICATION
Classification means the grouping of items to show the relation-
ship between them. Items that are classified together have something
in common; i.e., something must apply to all the items in that group or
class. Look at the items below. They may be classified as either goods
or services. Review the definitions and examples given in the reading.
Classify the following items as either goods or services.
1. car
2. law book
3. travel agency
4. briefcase
5. auto repair
6. computer
7. medical diagnosis
8. VCR
9. accounting ledger
10. calculator
11. job placement
12. suit
13. financial plan-
ning
14. forklift
15. newspaper delivery
16. management con-
sulting
17. computer program-
ming
18. time clock
19. office equipment
repair
20. income tax prepara-
tion
VI. TEXT ANALYSIS
A. Writers sometimes ask questions to focus and intensify the
reader's interest. When the reader comes to one of these questions, he
or she generally pauses and considers the question before going on.
An answer is not expected. This type of question is known as a "rhe-
torical question". Find them in the reading.
B. Give definitions for the following business fields by matching
a field on the left with a definition on the right. Use the definition form.
Term to be difined ------is--------definition
a. Management the handling of large amounts of infor-
mation generated by business operations
b. Marketing the measurement and communication of
financial information
c. Accounting the acquisition and utilization of capital
to start up, operate, and expand a com-
pany
Third is the sale of goods and services. Sale is the exchange of a V. CLASSIFICATION
product or service for money. A car is sold to someone in exchange for
Classification means the grouping of items to show the relation-
money. Goods are products that people either need or want; for exam-
ship between them. Items that are classified together have something
ple, cars can be classified as goods. Services, on the other hand, are
in common; i.e., something must apply to all the items in that group or
activities that a person or group performs for another person or organi-
class. Look at the items below. They may be classified as either goods
zation. For example, an auto-mechanic performs a service when re-
or services. Review the definitions and examples given in the reading.
pairing a car. A doctor also performs a service by taking care of people
Classify the following items as either goods or services.
when they are sick. So, business is a combination of all these activi-
ties: production, distribution, and sale. Still, there's another important 1. car 8. VCR 15. newspaper delivery
factor. This factor is the creation of profit or economic surplus. A ma- 2. law book 9. accounting ledger 16. management con-
jor goal in the functioning of an American business company is mak- 3. travel agency 10. calculator sulting
ing a profit. Profit is the money that remains after all the expenses are 4. briefcase 11. job placement 17. computer program-
paid. Creating an economic surplus or profit is, therefore, a primary 5. auto repair 12. suit ming
goal of business activity. 6. computer 13. financial plan- 18. time clock
7. medical diagnosis ning 19. office equipment
IV. COMPREHENSION CHECK 14. forklift repair
Answer the following questions about the meaning of business. 20. income tax prepara-
Questions with asterisk (*) cannot be answered directly from the text. tion
1. What is one modern definition of business? VI. TEXT ANALYSIS
2. *How does this modern meaning of business differ from the
A. Writers sometimes ask questions to focus and intensify the
traditional one?
reader's interest. When the reader comes to one of these questions, he
3. *What factors have brought about these changes?
or she generally pauses and considers the question before going on.
4. What does production involve?
An answer is not expected. This type of question is known as a "rhe-
5. What example of distribution is given in the reading?
torical question". Find them in the reading.
6. *Can you think of another example?
B. Give definitions for the following business fields by matching
7. How do goods differ from services?
a field on the left with a definition on the right. Use the definition form.
8. In addition to production, distribution, and sale, what other
factor is important in defining business? Term to be difined ------is--------definition
9. What is profit? a. Management the handling of large amounts of infor-
10. *In general, what do companies do with their profit? mation generated by business operations
11. Compare your definition of business with the one given in the b. Marketing the measurement and communication of
reading. financial information
12. *How are they similar? c. Accounting the acquisition and utilization of capital
13. In what ways does your definition differ from the one pre- to start up, operate, and expand a com-
sented in the text? pany
11 12
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