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Business is a word which is commonly used in many different languages. But exactly what does it mean?

The concepts and activities of business have increased in modern times. Traditionally, business simply
meant exchange or trade for things people wanted or needed. Today it has a more technical definition.
One definition of business is the production, distribution, and sale of goods and services for a profit. To
examine this definition, we will look at its various parts.
First, production is the creation of services or the changing of materials into products. One
example is the conversion of iron ore into metal car parts. Next these products need to be moved from the
factory to the marketplace. This is known as distribution. A car might be moved from a factory in
Surabaya to a car dealership in Solo or Yogyakarta.
Third is the sale of goods and services. Sale is the exchange of a product or service for money.
Goods are products which people either need or want; for example, cars can be classified as good.
Services, on the other hand, are activities which a person or group performs for another person or
organization. For instance, an auto mechanic performs a service when he repairs a car. A doctor also
performs a services by taking care of people when they are sick.
Business, then, is a combination of all these activities: production, distribution, and sale.
However, there is one other important factor. This factor is the creation of profit or economic surplus. A
major goal in the functioning of a business company is making profit. Profit is the money thats remain
after all the expenses are paid. Creating an economic surplus or profit is, therefore, a primary goal of
business activity.
B.check your understanding
Questions for comprehension
Give your answer to the following questions

1. What is one modern definition business?
2. What does production involve?
3. What example of distribution is given in the reading? Can you think of another example?
4. How do goods differ from services?
5. In addition to production, distribution, and sale, what other factor is importantin defining
6. What is profit? In general, what do companies do with their profits?

C. improve your vocabulary
Exercise 1:
Determine which of the following statements are true and which are false. Then put Tor F in the blanks.
1.Business is not just one activity but a combination of different operations such as production,
distribution, and sale.
2.From ancient to modern times the definition of business has remained the same..
3.Moving of truck load of oranges from the orchard to the supermarket is an example of production
4.A salesclerk provides a service by answering customers questions is a product.

Exercise 2:
Look at the terms in the left-hand column and find the correct synonyms in the right-column. Copy the
corresponding letters in the blanks.
1. Goods a. to carry out an action
2. Conversion b. trade
3. For instance c. grow
4. Distribution d. look at
5. Exchange e. change
6. On the other hand f. a particular payment of money
7. Examine g. products
8. Increase h. however
9. Perform i. moving or transporting
10. Payment j. for example

Exercise 3:
Fill in the blanks with noun or verbs forms. Use your dictionary if necessary

Noun Verb

Exercise 4:
Classify the following items as either goods or services
1. Car 11. Calculator
2. Medical diagnose 12. Employment agency
3. Briefcase 13. Audit
4. Auto repair 14. Forklift
5. Financial planning 15. Office equipment repair
6. Travel agency 16. Newspaper delivery
7. Computer 17. Computer programming
8. Video tape recorder 18. Time clock
9. Management consultant 19. Business book
10. Accounting ledger 20. Income tax preparation

Exercise 5:
.Use the correct noun or verbs forms in sentences. Change the grammatical form of the words if
1. Sell
a. An annual reports includes the .. figures of the company for the current fiscal year.
b. An auto dealership . cars, trucks, vans, and sometimes recreational vehicles.
2. Distribute
a. Some companies hold exclusive.. rights for specific products.
b. Factory representatives. products to wholesalers and retailers
3. Produce
a. How efficiently a company its products will in large measure determine its success.
b. The .. of high-technology instruments is one of the most rapidly growing industries in the
4. Classify
a. Items.. in order to show the relationship between them.
b. . means the grouping of items to show the differences between them.
5. Convert
a. When traveling from country to country on either business or pleasure, people.. one
currency to another.
b. The production process often involves the of raw materials into finish products.

Exercise 6
Match the word in the left-hand column to those in the right-hand column to make common compound
1. Business a. Achievement
2. Private b. manager
3. Professional c. ability
4. Objective d. motive
5. Employees e. consumer
6. Economic f. enterprise
7. Profit g. organization
8. Goods h. system

Exercise 7
Fill in the blanks with the bes choice
Earn need provide individuals
Property wages consumer private
Reward risk wealth good and services